SURYA FOOD _ AGRO LIMITED

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					CMYK


                                                                                                                                        DRAFT RED HERRING PROSPECTUS
                                                                                                                             Please read Section 60B of the Companies Act, 1956
                                                                                                                  (The Draft Red Herring Prospectus will be updated upon filing
                                                                                                                  with the Registrar of Companies, Uttar Pradesh & Uttarakhand)
                                                                                                                                                        100% Book Built Issue



                                                  SURYA FOOD & AGRO LIMITED
[Incorporated as a private Limited Company on November 26, 1992 under the Companies Act, 1956 as Surya Food & Agro Private Limited vide Certificate of Incorporation issued
by the Registrar of Companies, Uttar Pradesh & Uttarakhand, Kanpur. The name of the Company was changed to Surya Food & Agro Ltd. upon conversion into Public Limited
Company with effect from March 27, 2000 and a fresh certificate of incorporation has been obtained from Registrar of Companies, Uttar Pradesh & Uttarakhand, Kanpur.]
                                      Registered Office: D-1, Sector-2, Noida- 201301, District Gautam Budh Nagar, Uttar Pradesh
                      Tel.: +91-0120-2552989, 2522939; Fax: +91-0120-2558154; E-mail: investors@priyagold.com; Website: www.priyagold.com
                                              Contact Person: Mr. Rajesh Sodhi, Company Secretary & Compliance Officer
 PUBLIC ISSUE OF [ ] EQUITY SHARES OF RS. 10/- EACH AT A PRICE OF RS. [ ] PER EQUITY SHARE (INCLUDING SHARE PREMIUM OF RS. [ ] PER
 EQUITY SHARE) FOR CASH AGGREGATING RS. 13590.75 LACS BY SURYA FOOD & AGRO LIMITED (HEREINAFTER REFERRED TO AS THE “ISSUE”.
 THE ISSUE WILL CONSTITUTE [ ]% OF THE FULLY DILUTED POST ISSUE PAID-UP EQUITY SHARE CAPITAL OF THE COMPANY.
                                                          PRICE BAND: RS. [ ] TO RS. [ ] PER EQUITY SHARE
      THE ISSUE PRICE IS [ ] TIMES OF THE FACE VALUE AT THE LOWER END OF THE PRICE BAND AND [ ] TIMES OF THE FACE VALUE AT THE
                                                                    HIGHER END OF THE PRICE BAND
 In case of revision in the Price Band, the Bidding/Issue Period will be extended for 3 additional working days after revision of the Price Band subject to the Bidding/Issue
 Period not exceeding 10 working days. Any revision in the Price Band and the revised Bidding/issue Period, if applicable, will be widely disseminated by notification to
 the National Stock Exchange (“NSE”) and the Bombay Stock Exchange Limited (“BSE”), by issuing a press release, and also by indicating the change on the website of Book
 Running Lead Manager and at the terminals of the Syndicate members. The Issue is being made through the 100% Book Building Process wherein up to 50% of the Issue shall
 be allocated on a proportionate basis to Qualified Institutional Buyers, out of which 5% of the QIB Portion shall be available for allocation on a proportionate basis to Mutual
 Funds only, and the remainder of the QIB Portion shall be available for allocation on a proportionate basis to all Qualified Institutional Buyers, including Mutual Funds,
 subject to valid Bids being received at or above Issue Price. Further, upto 15% of the Issue shall be available for allocation on a proportionate basis to Non-Institutional
 Bidders and upto 35% of the Issue shall be available for allocation on a proportionate basis to Retail Individual Bidders, subject to valid Bids being received at or above the
 Issue Price.

                                                                    RISK IN RELATION TO FIRST ISSUE

 This being the first issue of Equity Shares of the Company, there has been no formal market for the Equity Shares of the Company. The face value of the Equity Shares is
 Rs. 10/- per Equity Share and the Issue Price is [ ] times of the face value. The Issue Price (as determined by the Company, in consultation with the Book Running Lead Manager,
 on the basis of assessment of market demand for the Equity Shares offered by way of Book Building Process) should not be taken to be indicative of the market price of the Equity
 Shares after the Equity Shares are listed. No assurance can be given regarding an active and/or sustained trading in the Equity Shares of the Company or regarding the price
 at which the Equity Shares will be traded after listing.

                                                                               GENERAL RISKS

 Investments in equity and equity related securities involve a degree of risk and investors should not invest any funds in this Issue unless they can afford to take the risk of
 losing their investment. Investors are advised to read the risk factors carefully before taking an investment decision in this Issue. For taking an investment decision, investors
 must rely on their own examination of the Company and the Issue including the risks involved. The Equity Shares issued in this Issue have not been recommended or approved
 by the Securities and Exchange Board of India (“SEBI”), nor does SEBI guarantee the accuracy or adequacy of this Draft Red Herring Prospectus. Specific attention of the
 investors is invited to the statements in the section titled “Risk Factors” beginning on page xi of this Draft Red Herring Prospectus.

                                                                  ISSUER’S ABSOLUTE RESPONSIBILITY

 The Company, having made all reasonable inquiries, accepts responsibility for and confirms that this Draft Red Herring Prospectus contains all information with regard to the
 Company and this Issue, which is material in the context of this Issue, that the information contained in this Draft Red Herring Prospectus is true and correct in all material
 aspects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which
 make this Draft Red Herring Prospectus as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect.

                                                                                 IPO GRADING

 The Company has opted for IPO Grading from Credit Analysis & Research Limited (CARE) and the same is awaited

                                                                                    LISTING

 The Equity Shares offered through the Red Herring Prospectus are proposed to be listed on the National Stock Exchange of India Limited (“NSE”) and the Bombay Stock
 Exchange Limited (“BSE”). The Company has received in-principle approvals from these Stock Exchanges for the listing of the Equity Shares pursuant to letters dated [ ]
 and [ ] respectively. For the purpose of the Issue, NSE is the Designated Stock Exchange.

 LEAD MANAGER TO THE ISSUE                                                                  REGISTRAR TO THE ISSUE




 KEYNOTE CORPORATE SERVICES LTD.
 4th Floor, Balmer Lawrie Building, 5, J.N.Heredia Marg,                                    BEETAL FINANCIAL & COMPUTER SERVICES (P) LTD.
 Ballard Estate, Mumbai – 400001.                                                           BEETAL HOUSE, 3rd Floor, 99 Madangir,
 Tel: +91–22–30266000-3; Fax: +91–22–22694323                                               Behind Local Shopping Centre, New Delhi- 110062.
 Website: www.keynoteindia.net; E-mail: mbd@keynoteindia.net                                Tel.: +91-011-29961281; Fax: +91-011-29961284
 SEBI Registration No.: INM 000003606                                                       Website: www.beetalfinancial.com; E-mail: surya@beetalfinancial.com
 AMBI Registration No: AMBI/040                                                             SEBI Registration No.: INR 000000262
 Contact Person: Mr. Satish Mangutkar                                                       Contact Person: Mr. Punit Mittal

                                                                               ISSUE SCHEDULE
  BID/ISSUE OPENS ON :                      [ ]                                         BID/ISSUE CLOSES ON :                          [ ]



                                                                                                                                                                                       C MYK
                                         Table of Contents

                                                                       Page
                                                                       No.
   I   DEFINITIONS AND ABBREVIATIONS                                    iii
  II   RISK FACTORS                                                     xi
 III   INTRODUCTION
       A) SUMMARY                                                       1
       B) GENERAL INFORMATION                                           10
       C) CAPITAL STRUCTURE                                             16
       D) PARTICULARS OF THE ISSUE                                      23
       E) BASIS OF ISSUE PRICE                                          36
       F) STATEMENT OF TAX BENEFITS                                     38
 IV    ABOUT SURYA FOOD & AGRO LIMITED
       A) INDUSTRY OVERVIEW                                             49
       B) BUSINESS OVERVIEW                                             55
       C) HISTORY AND CORPORATE STRUCTURE OF THE COMPANY                72
       D) AGREEMENTS                                                    78
       E) MANAGEMENT                                                    79
       F) PROMOTERS/PRINCIPAL SHAREHOLDERS                              90
       G) CURRENCY OF PRESENTATION                                      91
       H) DIVIDEND POLICY                                               91
  V    FINANCIAL STATEMENTS
       A) FINANCIAL INFORMATION OF THE ISSUER COMPANY                   92
       B) FINANCIAL & OTHER INFORMATION OF GROUP COMPANIES             118
       C) CHANGES IN ACCOUNTING POLICIES IN THE LAST THREE YEARS       119
       D) MANAGEMENT’S DISCUSSION AND ANALYSIS                         120
 VI    LEGAL AND OTHER INFORMATION
       A) OUTSTANDING LITIGATION, DEFAULTS AND MATERIAL DEVELOPMENTS   125
       B) REGULATORY AND OTHER APPROVALS                               136
VII    OTHER REGULATORY AND STATUTORY DISCLOSURES                      144
VIII   OFFERING INFORMATION
       A) TERMS OF THE ISSUE                                           153
       B) ISSUE STRUCTURE                                              155
       C) ISSUE PROCEDURE                                              158
 IX    MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION                  181
  X    MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION                 194
 XI    DECLARATION                                                     196




                                                ii
                                I. DEFINITIONS AND ABBREVIATIONS

COMPANY/ INDUSTRY RELATED TERMS

TERM                      DESCRIPTION
“SFAL”, “the              Unless the context otherwise requires, refers to Surya Food & Agro
Company”, “We”,           Limited, a public limited company incorporated under the Companies Act,
“us”and “our”             1956.
Articles of               The Articles of Association of the Company i.e., Surya Food & Agro
Association               Limited.
Auditors                  The statutory auditors of the Company, being M/s Vinay Aggarwal &
                          Associates, Chartered Accountants.
Board of Directors/       The board of directors of the Company or a committee constituted thereof.
Board
Director(s)               Director(s) of the Company unless otherwise specified.
Memorandum of             The Memorandum of Association of the Company.
Association
Registered Office of      D-1, Sector-2, Noida- 201301, District Gautam Budh Nagar, Uttar Pradesh.
the Company

ISSUE RELATED TERMS AND ABBREVIATIONS

TERM                       DESCRIPTION
Allotment/ Allotment       Unless the context otherwise requires, issue of Equity Shares pursuant to
of Equity Shares           this Issue.
Bid                        An indication to make an offer, made during the Bidding Period by a
                           prospective investor to subscribe to the Equity Shares at a price within
                           the Price Band, including all revisions and modifications thereto.
Bid Amount                 The highest value of the optional Bids indicated in the Bid-cum-
                           Application Form and payable by the Bidder on submission of the Bid for
                           this Issue.
Bid/ Issue Closing Date    The date after which the members of the Syndicate will not accept any
                           Bids for this Issue, which shall be notified in a widely circulated English
                           national newspaper, a Hindi national newspaper and a regional
                           newspaper.
Bid/ Issue Opening         The date on which the members of the Syndicate shall start accepting
Date                       Bids for this Issue, which shall be the date notified in a widely circulated
                           English national newspaper, a Hindi national newspaper and a regional
                           newspaper.
Bid-cum-Application        The form in terms of which the Bidder shall make an offer to subscribe to
Form                       the Equity Shares of the Company and which will be considered as the
                           application for allotment in terms of this Red Herring Prospectus.
Bidder                     Any prospective investor who makes a Bid pursuant to the terms of the
                           Red Herring Prospectus and the Bid-cum-Application Form.
Book Building Process      Book building mechanism as provided under Chapter XI of the SEBI
                           Guidelines, in terms of which this Issue is made.
BRLM                       Book Running Lead Manager to this Issue, in this case being Keynote
                           Corporate Services Limited.
CAN/ Confirmation of       The note or advice or intimation of allocation of Equity Shares sent to the
Allocation Note            Bidders who have been allocated Equity Shares after discovery of Issue
                           Price in the Book Building Process.



                                                    iii
TERM                     DESCRIPTION
Cap Price                The upper end of the Price Band, above which the Issue Price will not be
                         recognized and above which no Bids will be accepted.
Cut-off                  The Issue Price finalized by the Company in consultation with the BRLM
                         and it shall be any price within the Price Band. A Bid submitted at the
                         Cut-off Price by a Retail Individual Bidder is a valid Bid at all price levels
                         within the Price Band.
Depository               A depository registered with SEBI under the SEBI (Depositories and
                         Participant) Regulations, 1996, as amended from time to time.
Depositories Act         The Depositories Act, 1996, as amended from time to time.
Depository Participant   A depository participant as defined under the Depositories Act.
Designated Date          The date on which funds are transferred from the Escrow Account to the
                         Public Issue Account after the Prospectus is filed with the Registrar of
                         Companies, Uttar Pradesh & Uttarakhand, Kanpur following which the
                         Board of Directors shall allot Equity Shares to successful Bidders.
Designated Stock         In this case being the National Stock Exchange Limited.
Exchange
Draft Red Herring        This Draft Red Herring Prospectus filed with SEBI, which does not have
Prospectus/DRHP          complete particulars on the price at which the Equity Shares are offered
                         and size of the Issue
Equity Shares            Equity Shares of the Company of face value of Rs. 10/- each unless
                         otherwise specified in the context thereof.
Escrow Account           Account opened with Escrow Collection Bank(s) and in whose favour the
                         Bidder will issue cheques or drafts in respect of the Bid Amount when
                         submitting a Bid.
Escrow Agreement         Agreement to be entered into among the Company, the Registrar to this
                         Issue, the Escrow Collection Banks and the BRLM in relation to the
                         collection of the Bid Amounts and dispatch of the refunds (if any) of the
                         amounts collected, to the Bidders.
Escrow Collection        The banks, which are registered with SEBI as Banker (s) to the Issue at
Bank(s)                  which the Escrow Account for the Issue will be opened, in this case being
                         [•].
First Bidder             The Bidder whose name appears first in the Bid-cum-Application Form or
                         Revision Form.
Floor Price              The lower end of the Price Band, below which the Issue Price will not be
                         finalized and below which no Bids will be accepted.
Indian National          As used in the context of a citizen of India as defined under the Indian
                         Citizenship Act, 1955, as amended, who is not an NRI.
Issue                    The issue of [•] Equity Shares of Rs. 10 each fully paid up at the Issue
                         Price aggregating Rs. 13590.75 Lacs.
Issue/ Bidding Period    The period between the Bid / Issue Opening Date and the Bid/Issue
                         Closing Date inclusive of both days and during which prospective
                         Bidders can submit their Bids.
Issue Price              The final price at which Equity Shares will be issued and allotted in terms
                         of the Red Herring Prospectus or the Prospectus, as determined by the
                         Company in consultation with the BRLM, on the Pricing Date.
Margin Amount            The amount paid by the Bidder at the time of submission of the Bid, being
                         10% to 100% of the Bid Amount in case of QIB and 100% in case of other
                         than QIB applicants.
Mutual Funds             Means mutual funds registered with SEBI pursuant to the SEBI (Mutual



                                                  iv
TERM                      DESCRIPTION
                          Funds) Regulations, 1996, as amended from time to time.
Non Institutional         All Bidders that are not Qualified Institutional Buyers or Retail Individual
Bidders                   Bidders and who have Bid for Equity Shares for an amount more than Rs.
                          100,000/-.
Non Institutional         The portion of this Issue being upto 15% of the Issue consisting of [•]
Portion                   Equity Shares of Rs. 10/-, available for allocation to Non Institutional
                          Bidders.
Pay-in Date               Bid/Issue Closing Date or the last date specified in the CAN sent to
                          Bidders receiving allocation who pay less than 100% margin money at the
                          time of bidding, as applicable.
Pay-in-Period             Means:
                               (i) with respect to Bidders whose Margin Amount is 100% of the
                                    Bid Amount, the period commencing on the Bid/ Issue Opening
                                    Date and extending until the Bid/Issue Closing Date; and
                               (ii) with respect to QIBs, whose Margin Amount is 10% of the Bid
                                    Amount, the period commencing on the Bid/Issue Opening
                                    Date and extending until the closure of the Pay-in Date.
Price Band                The price band of a minimum price (“Floor Price”) of Rs. [•] and the
                          maximum price (“Cap Price”) of Rs. [•] and includes revisions thereof.
Pricing Date              The date on which the Company in consultation with the BRLM finalises
                          the Issue Price.
Prospectus                The Prospectus, to be filed with the Registrar of Companies, Uttar
                          Pradesh & Uttarakhand, Kanpur containing, inter alia, the Issue Price that
                          is determined at the end of the Book Building Process, the size of this
                          Issue and certain other information.
Public Issue Account      Account opened with the Banker to this Issue to receive monies from the
                          Escrow Account for this Issue on the Designated Date.
QIB Margin Amount         An amount representing 10% of the Bid Amount.
QIB Portion               Consists of [•] Equity Shares of Rs. 10/- each, being upto 50% of the Issue,
                          available for allocation to QIBs. 5% of the QIB Portion shall be available
                          for allocation on a proportionate basis to Mutual Funds only.
Qualified Institutional   Public financial institution as defined in section 4A of the Companies Act,
Buyers or QIBs            1956, scheduled commercial banks, mutual funds, foreign institutional
                          investor registered with SEBI, multilateral and bilateral development
                          financial institutions, venture capital funds registered with SEBI, foreign
                          venture capital investors registered with SEBI, state industrial
                          development corporations, insurance companies registered with the
                          Insurance Regulatory and Development Authority (IRDA), provident
                          funds with minimum corpus of Rs. 25 crores and pension funds with
                          minimum corpus of Rs. 25 crores)
Red Herring               The Red Herring Prospectus issued in accordance with Section 60B of the
Prospectus/RHP            Companies Act, which does not have complete particulars on the price at
                          which the Equity Shares are offered and size of this Issue. It carries the
                          same obligations as are applicable in case of a Prospectus and will be filed
                          with the Registrar of Companies, Uttar Pradesh & Uttarakhand, Kanpur
                          at least three days before the opening of this Issue. It will become a
                          Prospectus after filing with the Registrar of Companies, Uttar Pradesh &
                          Uttarakhand, Kanpur after pricing and allocation.
Registrar/ Registrar to   Beetal Financial & Computer Services (P) Limited.
this Issue


                                                   v
TERM                     DESCRIPTION
Retail Individual        Individual Bidders (including HUFs) who have Bid for an amount less
Bidders                  than or equal to Rs. 100,000 in any of the bidding options in this Issue.
Retail Portion           Consists of [•] Equity Shares of Rs. 10/- each, being upto 35% of the Issue,
                         available for allocation to Retail Individual Bidder(s).
Revision Form            The form used by the Bidders to modify the quantity of Equity Shares or
                         the Bid price in any of their Bid-cum-Application Forms or any previous
                         Revision Form(s).
                         Bombay Stock Exchange Limited and the National Stock Exchange of
Stock Exchanges
                         India Limited.
Syndicate                The BRLM and the Syndicate Member.
Syndicate Agreement      The agreement to be entered into between the Company and the
                         members of the Syndicate, in relation to the collection of Bids in this
                         Issue.
Syndicate Member         [•]
Transaction Registration The slip or document issued by the Syndicate Member/Sub-Syndicate
Slip/ TRS                Member to the Bidders as proof of registration of the Bid.
Underwriters             The BRLM and the Syndicate Member.
Underwriting             The Agreement among the Underwriters and the Company to be entered
Agreement                into on or after the Pricing Date.

GENERAL / CONVENTIONAL TERMS:

TERM                      DESCRIPTION
Companies Act             The Companies Act, 1956, as amended from time to time.
Depositories Act          The Depositories Act, 1996, as amended from time to time.
Depository                A depository registered with SEBI under the SEBI (Depositories and
                          Participant) Regulations, 1996, as amended from time to time.
Depository Participant    A depository participant as defined under the Depositories Act.
Equity Shares             Equity Shares of the Company of face value of Rs. 10/- each unless
                          otherwise specified in the context thereof.
Financial Year/ Fiscal/   The period of twelve months ended March 31 of that particular year.
FY
Indian GAAP               Generally Accepted Accounting Principles in India.
Insurance Act             Insurance Act, 1938, as amended from time to time.
I. T. Act                 The Income Tax Act, 1961, as amended from time to time.
I.T. Rules                The Income Tax Rules, 1962, as amended from time to time, except as
                          stated otherwise.
Non Resident              A person who is not resident in India except NRIs and FIIs.
NRI/ Non-Resident          A person resident outside India, as defined under FEMA and who is a
Indian                    citizen of India or a person of Indian origin, each such term as defined
                          under the FEMA (Deposit) Regulations, 2000, as amended.
RBI                       Reserve Bank of India constituted under the RBI Act.
RBI Act                   The Reserve Bank of India Act, 1934 as amended from time to time.
SCRA                      Securities Contract (Regulation) Act, 1956, as amended from time to time.
                          Securities Contracts (Regulation) Rules, 1957, as amended from time to
SCRR
                          time.
SEBI                      Securities and Exchange Board of India constituted under the SEBI Act.
                          Securities and Exchange Board of India Act, 1992, as amended from time
SEBI Act
                          to time.



                                                   vi
TERM                DESCRIPTION
SEBI Guidelines     The SEBI (Disclosure and Investor Protection) Guidelines 2000, as
                    amended from time to time, including instructions, guidelines and
                    clarifications issued by SEBI from time to time.

ABBREVIATIONS

ABBREVIATION        FULL FORM
AGM                 Annual General Meeting
AMBI                Association of Merchant Bankers of India
AS                  Accounting Standards issued by the Institute of Chartered Accountants
                    of India.
AY                  Assessment Year
BSE                 Bombay Stock Exchange Limited.
BG/LC               Bank Guarantee/ Letter of Credit
CAGR                Compounded Annual Growth Rate.
CDSL                Central Depository Services (India) Limited.
DP                  Depository Participant
ECS                 Electronic Credit System
EGM                 Extra Ordinary General Meeting of the shareholders.
EPS                 Earnings per Equity Share.
FCNR Account        Foreign Currency Non Resident Account.
FEMA                Foreign Exchange Management Act, 1999, as amended from time to time
                    and the regulations issued thereunder.
FII                 Foreign Institutional Investor (as defined under SEBI (Foreign
                    Institutional Investors) Regulations, 1995, as amended from time to time)
                    registered with SEBI under applicable laws in India.
FIs                 Financial Institutions.
FIPB                Foreign Investment Promotion Board, Department of Economic Affairs,
                    Ministry of Finance, Government of India
FVCI                Foreign Venture Capital Investors registered with SEBI under the SEBI
                    (Foreign Venture Capital Investor) Regulations, 2000.
GDP                 Gross Domestic Product
GIR Number          General Index Registry Number.
GOI/ Government     Government of India.
HUF                 Hindu Undivided Family.
INR / Rs./ Rupees   Indian Rupees, the legal currency of the Republic of India.
NAV                 Net Asset Value.
NR                  Non Resident
NRE Account         Non Resident External Account.
NRI/Non-Resident    A person resident outside India, as defined under FEMA and who is a
Indian              citizen of India or a person of Indian origin, each such term as defined
                    under the FEMA (Deposit) Regulations, 2000, as amended.
NRO Account         Non Resident Ordinary Account.
NSDL                National Securities Depository Limited.
NSE                 National Stock Exchange of India Limited.
P/E Ratio           Price/Earnings Ratio.
PAN                 Permanent Account Number.
ROC/Registrar of    The Registrar of Companies, Uttar Pradesh & Uttarakhand, Kanpur
Companies



                                           vii
ABBREVIATION       FULL FORM
RONW               Return on Net Worth.

INDUSTRY RELATED TERMS AND ABBREVIATIONS

TERM/              DESCRIPTION/FULL FORM
ABBREVIATION
NOIDA              New Okhla Industrial Development Authority
U.P.               Uttar Pradesh
MRP                Maximum Retail Price
KV                 Kilo Vatt
LPG                Liquified Petroleum Gas
BMAI               Biscuit Manufacturers Association of India
KG                 Kilo Gram
MT                 Metric Tonne
TPD                Tonnes Per Day
SIDCUL             State Industrial Development Corporation of Uttaranchal Limited




                                          viii
CERTAIN CONVENTIONS; PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA

Unless indicated otherwise, the financial data in this DRHP is derived from the restated financial
statements prepared in accordance with Indian GAAP and included in this DRHP. SFAL’s fiscal year
commences on April 1 and ends on March 31. So all references to a particular fiscal year are, unless
otherwise stated, to the twelve-month period ended March 31 of that year.

Unless otherwise specified or the context otherwise requires, all references to a particular fiscal year,
“fiscal”, “Fiscal”, “FY” or “Financial Year” in this DRHP are to the twelve months ended March 31 of that
year. For additional definitions, see the section titled “Definitions and Abbreviations” beginning on page
(iii).

Unless stated otherwise, all figures have been expressed in lacs.

In this DRHP, any discrepancies in any table between the total and the sums of the amounts listed are
due to rounding off to two decimal places.

Unless otherwise specified or the context otherwise requires, all references to “India” contained in this
DRHP are to the Republic of India, together with its territories and possessions.

Currency of Presentation

All references to “Rupees” or “Rs.” or “INR” are to Indian Rupees, the official currency of the Republic of
India.

Industry and Market Data

Unless stated otherwise, industry data used throughout this DRHP has been obtained from industry
publications. Industry publications generally state that the information contained in those publications
has been obtained from sources believed to be reliable but that their accuracy and completeness are not
guaranteed and their reliability cannot be assured. Although the Company believes that the industry data
used in this DRHP is reliable, it has not been verified by any independent source. Further, the extent to
which the market data presented in this DRHP is meaningful depends on the reader’s familiarity with
and understanding of the methodologies used in compiling such data. There are no standard data
gathering methodologies in the industry in which the Company conducts the business, and
methodologies and assumptions may vary widely among different industry sources.




                                                     ix
                                 FORWARD-LOOKING STATEMENTS

This DRHP contains certain “forward-looking statements”. These forward looking statements can
generally be identified by words or phrases such as “expect”, “estimate”, “intend”, “may”, “plan”,
“project”, “shall”, “will” or other words or phrases of similar importance. Similarly, statements that
describe Company’s objectives, strategy, plans or goals are also forward-looking statements.

All forward looking statements are subject to risks, uncertainties and assumptions about the Company
that could cause actual results to differ materially from those contemplated by the relevant forward-
looking statement. Important factors that could cause actual results to differ materially from the
expectations include, among others:

•   General economic and business conditions;
•   Company’s ability to successfully implement its strategy and its growth and expansion plans;
•   Increasing competition in the food processing industry;
•   Increases in labour costs, raw material prices, freight rates, prices of plant & machineries and
    insurance premia;
•   Manufacturers’ defects or mechanical problems with Company’s plant & machineries;
•   Cyclical or seasonal fluctuations in the operating results due to prevailing market conditions;
•   Amount that the Company is able to realize from the clients;
•   Changes in laws and regulations that apply to the food processing industry;
•   Changes in fiscal, economic or political conditions in India;
•   Social or civil unrest or hostilities with neighboring countries or acts of international terrorism;
•   Changes in the foreign exchange control regulations, interest rates and tax laws in India.

For further discussion of factors that could cause Company’s actual results to differ, please see the section
entitled “Risk Factors” included in this DRHP. In the light of inherent risks and uncertainties, the
forward-looking statements, events and circumstances discussed in this Prospectus might not occur and
are not guarantees of future performance.

Neither the Company, its Directors and Officers, any member of the Issue Management Team nor any of
their respective affiliates has any obligation to update or otherwise revise any statements reflecting
circumstances arising after the date hereof or to reflect the occurrence of underlying events, even if the
underlying assumptions do not come to fruition. In accordance with SEBI requirements, for purposes of
the Issue, the Company and the BRLM to the Issue will ensure that investors in India are informed of
material developments relating to the business until such time as the grant of listing and trading
permission by the Stock Exchanges.




                                                     x
                                            II. RISK FACTORS

An investment in Equity Shares involves a high degree of risk. You should carefully read all the
information mentioned in this Red Herring Prospectus, including the risks and uncertainties described
below, before making an investment in our Company’s Equity Shares. If any of the following risks
actually occur, our business, financial condition and results of operation could suffer, the trading price of
our Equity Shares could decline, and you may lose all or part of your investment.Unless specified or
quantified in the relevant risk factors below, we are not in a position to quantify financial or other
implications of any risks mentioned herein.

Risk Factors Internal to the Company

Outstanding litigations

1.   We are involved in a number of legal proceedings which if determined against us, could adversely
     affect our business and financial condition.

     Our Company, the Directors, the Promoters are parties to certain legal proceeding. No assurances can
     be given as to whether these matters will be settled in our favour or against us. A summary of the
     pending proceedings is set forth below:

     a) Litigations Against Company

        Criminal Case

        Gatoo Traders (the “Complainant”) v. Mr B. P. Agarwala, Chairman & Mr. Shekhar Agarwal,
        Directors Surya Food & Agro Limited (the “Accused”)

        The case is filed in the court of Hon’ble Judicial Magistrate Munsifs, Pulwama (Jammu &
        Kashmir) under section 418 read with section 120B of Indian Penal Code, 1960 (IPC). The
        Complainant was appointed as a dealer for distribution of Priya Gold biscuits for District
        Pulwama by the accused from 2005 to 2010. The Complainant alleged that a payment of Rs.
        3,00,000/- vide Demand Draft no. 527263 dated 06.11.2006 was made by him, but the Accused
        failed to supply the goods in trade. The Complainant also alleged criminal intention of cheating
        the Complainant and usurping the draft amount as well as the earlier balance amount. The
        Complainant has prayed for criminal proceedings against the accused. The accused was
        summoned through bailable warrants to the tune of Rs. 10,000/- each.

        Ad-interim relief order has been issued by the Sub-Judge temporarily restraining the Accused
        from causing any sort of interference through any means with the Complainant’s right to run the
        distribution/dealership of Priya Gold biscuits and juices for Pulwama and Shopian and not to
        supply the same to any other person, agency, firm other than to the Complainant. The Company
        has moved to the Hon’ble High Court, Jammu and Kashmir under Section 482 of I.P.C for
        quashing of complaint case.




                                                     xi
   Other Cases

   The summary of other cases pending against the Company is as follows:
                                                                                              (Rs. in lacs)
       Sr.                    Particulars                      No. of          Approx. Amount
       No                                                  Cases/Disputes     Involved wherever
                                                                                 quantifiable

        1      Central and Custom Cases                           7                         274.18
        2.     Service Tax Cases                                  3                          23.12
        3      Civil Cases                                        4                           7.47

   For details please refer to page no. 125 of this DRHP.

b) Litigation against the Promoter/Directors

   Criminal Cases

   i         Suresh Kumar Bagri, Proprietor (the “Complainant”) v. Shri Shekhar Agarwal, Director,
             Surya Food & Agro Limited.

             Case no. C-1/91/2005 under Section 420/406/506 of the Indian Penal Code (IPC) in the
             Court of Chief Judicial Magistrate at Jamshedpur.

             The Complainant being a businessman was interested for dealership of the products of the
             Company for the Dhanbad region, within the Jharkhand State in the name of “Mahalaxmi
             Enterprises”. Complainant deposited a sum of Rs. 2,50,000/- as security deposit, for the
             purpose of getting the dealership of the products of the Company, in the UTI Bank Ltd.,
             Jamshedpur (hereinafter referred to as ‘Bank’) and got a demand draft no. 042994 dated
             9/4/2003 drawn on the Bank for delivering the same to the Company for the said purpose.
             The case of the Complainant is that he was neither awarded the dealership, nor was the
             deposited amount refunded to him.

             The Complainant has alleged criminal breach of trust by the Company claiming that the
             Company has misappropriated the aforesaid amount in spite of receipt of notice on
             20/12/2004.

             The conciliation proceedings between the parties are under process for resolving the matter.

   ii        Mr. Shekhar Agarwal, Director (Petitioner) Surya Food & Agro Limited v. State of
             Jharkhand , Suresh Kumar Bagri, Proprietor of M/s S.K. Enterprises.

             Case no. A.B.A. No. 44/2007 in the High Court of Jharkhand at Ranchi.

             The petition was filed on 29/11/2006 for grant of Anticipatory Bail to the petitioner as he was
             seriously confronted with the risk of being arrested or taken into custody upon his surrender
             in connection with Case No. C-1 91/2005 registered under Sections 420, 406 and 506 of IPC.

             A prayer has been made before the Court for the release of the petitioner in the event of his
             arrest/ surrender.




                                                     xii
         iii M/s Kiri Associates Pvt. Ltd. (the “Complainant”) v. Mr. B. P. Agarwala, authorized
             signatory, ISKCON & others (the “Accused”).

               The case is filed in the Court of Hon’ble C.J.M Court, Panipat under Section 138 of the
               Negotiable Instruments Act, 1881.

               Our Chairman is a member and authorized signatory of the religious institution “ISKCON”
               which passed the tender of the Complainant and awarded them the work for the construction
               of the temple cum devotees boarding and lodging facility at A-5, Sector-33, Noida, U.P.
               Running bills for the construction were given to the Accused on different dates. To discharge
               their liability, the Accused issued a cheque bearing no. 267227 dated 12/01/2005 drawn on
               ICICI Bank Ltd. Noida Branch, G-31 & 32, Sector-18, Noida – 201 301 (U.P.) amounting to Rs.
               4,89,500/- from their bank SBGEN a/c no. 003101061819. The Complainant presented the
               said cheque in his bank, Bank of India, East of Kailash Branch, New Delhi for encashment on
               12/01/2005. The said cheque was dishonored by bankers of the Accused vide memo dated
               13/01/2005 on account of “Insufficient Funds” followed by two similar dishonors.

               Thereafter, the Complainant sent a legal notice to the Accused through his advocate,
               demanding the amount due within 15 days. The Complainant prayed that the Accused be
               directed to make the payment of cheque to the Complainant. The case is pending before
               Hon’ble Court.

         Other Cases

         The summary of other cases pending against the the Promoters/Directors are as follows:

                                                                                    (Rs. in lacs)
          Sr.                   Particulars                     No. of         Approx. Amount
          No                                                Cases/Disputes    Involved wherever
                                                                                 quantifiable
                                                                                 (Rs. in Lacs)
          1      Central and custom Cases                          3                 92.64
          2.     Civil Cases                                       3                  1.50
          3      IT Cases                                          1           Not Quantifiable

         For details please refer to page no. 125 of this DRHP.

Specific to the Project

2.   Out of the total fund requirements about 45% is based on our estimates and is yet to be appraised by
     our Banker.

     The total funds requirement of the Company for the proposed expansion in biscuit manufacturing
     capacity and investment in our subsidiary for setting up of Condensed Milk Plant and Chocolate
     plant is estimated at Rs14390.75 lacs. Our Banker State Bank of India have appraised our expansion
     project for biscuit manufacturing to the extent of Rs.7938.08 lacs and have also agreed in-principle for
     sanction of a term loan of Rs.200 lacs. The balance fund requirement of Rs.6452.67 lacs is presently
     based on our estimate.




                                                     xiii
     Management Proposal

     We have approached our banker for appraisal of the same and for sanction of Rs.600 lacs as term loan
     to part finance the same. We are confident that the same will be in place shortly. We do not foresee
     any major deviation in our estimates.

3.   We have not placed orders for the machineries and other equipment proposed to be purchased by us
     as a part of the objects of the Issue. We may face time and cost overruns in relation to the same.

     We have not yet entered into any definite agreements or placed orders for some machinery and
     equipment out of the total machineries and other equipments required for our project (for details please
     refer section titled “Object of the Issue” commencing on page 23). We are subject to risks on account of
     inflation in the price of machinery and other equipment that we require for the project. Further, in
     respect of the machinery/equipment/other project related services that we propose to
     import/procure from overseas, we may be subject to the risks arising out of currency rate
     fluctuations. These factors may increase the overall cost of our Project, and we may have to raise
     additional funds by way of additional debt or equity placement to complete the objects of this Issue,
     which may have an adverse effect on our business and results of operations.

     Management Proposal: We have already commenced construction of Building & other civil work for
     the proposed biscuit expansion plan at Greater Noida plant. We have deployed Rs.699.32 lacs
     towards the same. The proposed project is appraised by our Bankers, State bank of India, Overseas
     Branch, New Delhi who have also sanctioned a term loan of Rs.200 lacs to part finance the same. We
     have already identified and placed orders for majority of machineries required for the proposed
     expansion for which payment has to be made. We will use term loan sanctioned by State bank of
     India towards payment of advance for procurement of the machineries and other equipments. Hence,
     there will not be any substantial increase in the cost of our project.

4.   The implementation of the activities required pursuant to the objects of this Issue is dependent on
     performance of external agencies. Any shortfall in the performance of these external agencies may
     adversely affect our expansion plans.

     The implementation of the activities required pursuant to the objects of this Issue is dependent on
     performance of external agencies, which are responsible for construction of buildings, installation
     and commissioning of plant and machinery and supply and testing of equipment. We cannot assure
     that the performance of external agencies will meet the required specifications or performance
     parameters. If the performance of these agencies is inadequate in terms of the requirements, this may
     result in incremental cost and time overruns, which in turn may adversely affect our expansion plans.

5.   We are entering into new businesses and activities and we cannot assure you that the new businesses
     will be successful.

     We plan to diversify our operations, by taking advantage of opportunities created by regulatory and
     economic reforms. We plan to enter into the business of manufacturing Dairy products and
     Chocolates through one of our subsidiary company. We do not have significant experience in these
     new businesses and activities, and they may involve risks and difficulties with which we are not
     familiar. They may require capital and other resources, as well as management attention, which could
     place a burden on our resources and abilities.




                                                     xiv
6.   Various licenses/approvals required for the proposed new plants of Subsidiary Company Surya
     Processed Food Pvt. Ltd.at Haridwar are yet to be obtained.
     Our Subsidiary Company requires various consents/permissions/licenses/approvals from various
     Governmental Authorities for the proposed new plants at Haridwar, Uttaranchal. The applications
     for such licenses/approvals would be made to the respective authorities at various stages of project
     implementation. There can be no assurance that we will receive the approvals on a timely basis, or at
     all. If we do not receive the requisite approvals for our new factories or if such approvals are delayed,
     our operations and proposed project may be adversely affected.

Specific to the Company

7.   Our company is operating in highly competitive environment.

     We face stiff competition from various domestic as well as Multi National Companies. Our
     competitors include major companies such as Britannia Industries ltd, Parle Biscuits Ltd and ITC Ltd.
     and other players especially in northern region of India such as Anmol Bakers Ltd., Super Snacks Pvt.
     Ltd., Bakeman’s Industries Ltd. etc. and other small unorganized players. In such a competitive
     environment, we may face pressures from buyers such as pricing, order size, product quality etc. &
     such pressures may put strains on our profit margins.

8.   Our business is dependent on our manufacturing facilities. The loss or shutdown of operations due to
     unrest of labours at any point of our manufacturing facilities may have a material adverse effect on
     our business, financial condition and results of operations.

     All our manufacturing facilities located at Greater NOIDA, Lucknow and Surat are subject to
     operating risks, such as the breakdown or failure of equipment, labour disputes, strikes, performance
     below expected levels of output, and the need to comply with the directives of relevant government
     authorities. The occurrence of any of these risks could significantly affect our operating results.

9.   We may be exposed to risk pertaining to Labour Unrest.

     We have employed about 1200 full-time employees. Our business is highly labour-intensive and
     managing a team engaged in doing largely repetitive work poses serious challenge. Any disruptions
     in relationship with employees may lead to Labour Unrest and thereby affect our business.

     Management Proposal: Over the years we have developed a cordial relationship with our personnel.
     Since inception, we have not faced any strike or lock-outs. Besides this, we also do not have any
     worker’s union in any of our manufacturing plant.

10. The shortage of various raw materials and manufactured components can adversely affect our
    results of operations.

     We rely on various suppliers to secure raw materials such as wheat, sugar, and edible vegetable oil
     etc., required for the manufacturing of our products. A disruption in timely deliveries from our
     suppliers or decrease in availability of such components could have an adverse affect on our ability to
     meet our commitments to customers or increase our operating costs. While we believe that our source
     of supply of raw materials and components will be generally sufficient for our needs in the
     foreseeable future, our results of operations or financial condition could be negatively impacted
     should the supply turn out to be insufficient for our operations. There may be instances of delay in
     delivery of raw materials and manufactured components, which may hamper our production
     schedule and lead to delays in supply.




                                                      xv
11. Increases in the cost of raw materials and components or an increase in labour costs can put pressure
    on our margins and may adversely impact our financial condition and results of operations.

    Our business is subject to the risk of price increases and fluctuations. Our operations require
    substantial amounts of wheat, sugar, edible oil and other components. We do not typically enter into
    long term contracts for the supply of raw materials or components and are hence exposed to
    fluctuations in the price and demand for such components, which may be driven by governmental
    regulations, import duties, manufacturing costs, etc. To the extent our contracts do not include price
    variation clauses , we are exposed to price fluctuations in procuring high value components and raw
    materials. In the event the cost of raw materials and components increases after we enter into
    contracts and we are not able to pass on such price increase to our customers, we would be forced to
    absorb such increases. Any such absorption of increased costs would cause a material adverse impact
    on our financial position.

12. If we are unable to adapt to technological changes, our business could suffer.

    Our future success will depend in part on our ability to respond to technological advances in the
    businesses in which we operate, on a cost-effective and timely basis. The development and
    implementation of such technology entails significant technical and business risks. We cannot assure
    you that we will successfully implement new technologies effectively. If we are unable, for technical,
    legal, financial or other reasons, to adapt in a timely manner to changing market conditions, customer
    requirements or technological changes, our business, financial performance and the trading price of
    our Equity Shares could be adversely affected.

13. Our success depends in large part upon our Directors and key managerial personnel and our ability
    to attract and retain them.

    We are highly dependant on the expertise and services of our Directors and key managerial
    personnel. If we lose any of these key personnel, we may find it difficult to find replacements with
    similar knowledge and experience, especially in relation to our business and our Company, and
    integrate them into our organization. As a result, our business and financial condition could be
    adversely affected. If we are unable to attract skilled professionals, fail to integrate them into our
    organization, or fail to retain them after we have invested resources in their training, our ability to
    compete and our results of operations may be adversely affected.

14. We have contingent liabilities as per Audited accounts as on 30/09/2007 under Indian Accounting
    Standards, which may adversely affect our financial conditions details of which are as follows:

                                                 (Rs.in Lacs)
     Particulars                                     Six Months
                                                         Ending
                                                      30/09/2007
     Counter Guarantees given to bank                    2860.00
     Corporate Guarantee                                   15.14
                       Total                             2875.14

    Management Proposal: We have provided counter guarantee to our Banker State Bank of India
    towards securing credit facilities to the extent of Rs.2180.00 lacs sanctioned to our wholly owned
    subsidiary Surya Fresh Foods Ltd. After 30/09/2007, the audited accounts, corporate guarantee to
    the extent of Rs.680.00 lacs provided by us have already been released.




                                                   xvi
15. Certain Restrictive Covenants of the loan agreement.
     The Company has availed credit facilities with the Banks and there are certain restrictive covenants in
     the sanction letters for term loans and working capital loans, among other things, which require the
     company to obtain the approval of the lenders or provide restrictions, namely for, permission for
     expansion, change in capital structure, change in management, disposal of assets, declaring
     dividends at a time while the company is in default, undertaking material diversification in the
     business etc.

Risk Factors External to the Company and beyond the control of the Company

1.   Dependence of Agricultural activities on monsoon and weather conditions.

     As a food processing Company, we are depended on Agriculture Industry for raw material.
     Agricultural industry is largely dependent on monsoon and weather conditions. Meteorologically,
     our country has diversified and different weather conditions prevail at different places. Sometimes,
     one region receives very heavy rainfall whereas other region receives scant rainfall. There is also
     unevenness in the Irrigated Area. Though, the Irrigated area has increased substantially over a period
     of years, the agricultural industry is still dependent upon monsoon. Any vagaries of weather and
     abnormal monsoon may ruin crops and will also affect the business of our Company.

2.   Political, economic and social developments in India could adversely affect our business

     We derive virtually all of our revenues from India. Our operations and financial results and the
     market price and liquidity of our equity shares may be affected by changes in Indian Government
     policy or taxation or social, ethnic, political, economic or other developments in or affecting India.

3.   Factors beyond the management’s control like Natural calamities and acts of violence involving
     India.

     Political, Economical and Social unrest, terrorist attacks, civil disturbances and regional conflicts in
     the country could adversely affect the business of the Company. Natural calamities and adverse
     weather conditions could have a negative impact on the business of our Company. Floods,
     earthquakes, terrorist attacks and other acts of violence or war/destruction involving India, are also
     other factors which will have negative impact on business condition in India.

4.   Changes in domestic Tax Laws

     Any changes in the tax laws prevailing in India particularly the income tax might lead to increased
     tax liability of the Company thereby putting pressures on our profitability. Change in tax laws,
     particularly income tax, can have an impact on the post-tax profits of the Company.

5.   Volatility in Share Prices.

     After the Public Issue, the price of the Equity Shares may be highly volatile and may fluctuate
     significantly due to many factors including variations in the operations of the Company and changes
     in the regulatory environment.




                                                    xvii
NOTES


1.   The net worth of SFAL as per the restated financial statement as at 30/09/2007 is Rs. 7519.15 lacs.
2.   The average cost of acquisition of the equity Shares of Rs. 10 each by the Promoters of SFAL is Rs.0.38
     per equity share.
3.   Book value of the Equity Shares of the Company, as per the restated financial statement as at
     30/09/2007 is Rs. 41.81 per Equity Share.
4.   Investors are advised to refer the paragraph on “Basis of Issue Price” on page no. 36 of this DRHP
     before making an investment in the Issue.
5.   Except as mentioned in the sections titled “Capital Structure” beginning on page no.16 of this DRHP,
     SFAL has not issued any Equity Shares in the last twelve months.
6.   The Directors, Promoters and Promoter Group of the Company have not entered into any purchase
     or sale transactions of the Company’s shares in the last six months except the bonus shares allotted to
     them. For details of allotment please refer page no.16.
7.   For details on Related Party Transactions, refer to the section titled “Related Party Transactions” on
     page no.108 of this DRHP.
8.   Investors are free to contact the BRLM for any complaints, clarification or information pertaining to
     this Issue. For contact details of the BRLM, please refer to the cover page of this DRHP.
9.   All information shall be made available by the BRLM and the Company to the public and investors at
     large and no selective or additional information would be available only to a section of the investors
     in any manner whatsoever.
10. In addition to the BRLM, the Company shall be obliged to update the DRHP and keep the public
    informed about any material changes till listing and trading commences in respect of the shares
    issued through this issue.
11. For interest of the promoters, please refer to the section titled “Promoters and their Background”
    beginning on page no. 91 of this DRHP.




                                                    xviii
                                        III. INTRODUCTION

A) SUMMARY OF OUR BUSINESS, ISSUE & RESTATED FINANCIAL DATA

Our Business

   We are one of the leading manufacturers of Biscuits in India. We are into the business of
   manufacturing and selling of Biscuits for the past 15 years. During this period, we have established
   strong manufacturing capabilities and have invested substantially in developing consumer
   preference for our products. Our Biscuits are sold under a well known brand name “Priyagold”.
   Our trademarks/ brands “Hak Se Maango” & “Priyagold” have emerged as one of the most
   powerful brands in FMCG sector. We have continued to invest in the front end on Brands, our
   manufacturing capabilities, deliverables and distribution strength.

   Today, we have 4 plants located in Greater Noida, Lucknow (U.P). and Surat (Gujarat). We also
   outsource some of our requirements from another plant located in Hyderabad. Our capacities have
   reached 85,000 MT p.a. during this time which along with strong brand building and distribution
   capabilities have enabled us to command a sizable market share in the Biscuit market despite
   competition from well established players in the industry.

   We have developed a distribution channel through Consignee sales agents / super stockists and
   distributors throughout the country. Though our concentration is largely in the Northern & Central
   part of the country, we have penetrated into the other regions considerably. Our Brands now have
   greater availability in rural markets in Northern India and also up markets in major cities across pan
   India.

   After establishing our foothold in Biscuit industry, we have continued to adopt a strategy to identify
   and commercialize profitable growth opportunities by leveraging established brand and distribution
   network. Following this strategy, we diversified into manufacturing of fruit juices through our
   subsidiary Surya Fresh Foods Ltd. The manufacturing facility is located at Greater Noida, UP. It has
   a capacity of 130 Kilo Litres/Day and has state of art manufacturing/processing facilities which are
   ISO 9001:2000 certified.

   We have consciously invested in creating markets for fruit juices and have established brands such as
   “Fresh Gold” and “Treat”. Both the brands are also well established and have penetrated into the
   fruit juice market aggressively by commanding considerable market share. Recently, we have also
   forayed into the aerated fruit drink segment with a launch of “Fresh Fizzy” which is launched into
   two flavours, Apple and Orange.

   Our sales and marketing team has been working towards innovative and effective marketing tools to
   remain competitive in a fiercely competitive environment. Recently, we have won a tender for
   supply of Priyagold Biscuits products and “Fresh gold” & “Treat” brands of fruit juices to catering
   units on Indian Railway Stations. This tender is awarded by Indian Railway Catering and Tourism
   Corporation Ltd. (IRCTC) which allows us to set-up food Kiosk for sale of our products at 193
   Railway Stations which will translate into approximately 300 food Kiosks spread across various
   cities in India. We have commenced establishment of these Kiosks by establishing about 30 Kiosks
   on various Railway Stations and balance would also be functional soon. We will sell our products at
   Kiosks which will give us enhanced brand visibility and would contribute considerably to the
   turnover. This initiative has added new dimensions to our marketing and distribution effort recently.




                                                   1
    We are also aggressively marketing our products in institutional category directly. Presently our
    products viz. biscuits and juices are supplied to Air lines, Hotels, Railways and organized retail
    outlets.

    In fiscal 2007, we posted consolidated gross sales of Rs. 29513.02 lacs and consolidated profits after
    taxes stood at Rs. 435.92 lacs. In the half year ended 30/09/2007 we have pooled consolidated gross
    sales of Rs. 19402.66 lacs and profit after tax at Rs. 671.65 lacs.

Our Business Strategy

•   Expansion & Diversification

    There is a general optimism in the market at macro economic as well as industry specific (FMCG &
    Package Food) levels. The Government of India has recently announced exemption on excise duty on
    Biscuits up to MRP of Rs.100/- per KG. Our Company is expected to benefit tremendously as our
    products fall in this category. Though continued inflation in input prices especially wheat, edible oils
    and dairy products will have a strain on profitability; the exemption in excise duty would support the
    growth of our Company. With continued best managerial inputs, procurement and distribution
    policy, our Company is well placed to reap the benefits of duty structure and the buoyant economic
    conditions in the country as a whole.

    We continued to pursue a strategy to identify and commercialize profitable growth opportunities on
    the strength of established brands. We are proposing to increase our capacities by 64,500 MT p.a. by
    establishing new manufacturing unit for the Biscuit segment.

    We are also diversifying, to establish a “Chocolate plant” and “Condensed milk” plant through our
    another 100% subsidiary Surya Processed Food Pvt. Ltd. We have procured the required licenses and
    approvals and have also acquired the land at Haridwar, Uttaranchal where various fiscal benefits are
    available. The proposed condensed milk plant also has a great synergy to us as almost 50% of the
    condensed milk products would be utilized by us for biscuits manufacturing. It has twin benefits of
    backward integration, price & supply competitiveness.

•   Brand

    Our strategy of strengthening the brands especially the Umbrella brand “Priyagold” has resulted in
    creating immense brand recall value. We are continuing with our effort of strengthening the brand
    with a scientific approach which will result in growth of customer base, price premium, consumer
    loyalty which is expected to result in increased earning and ultimately enhancing enterprise value of
    our Company.

    We have identified and established in various growth sectors eg. Snacks & Health with launch of
    various sub brands such as “Butter Bite”, “Classic Cream”, “Kids Cream”, “Butter Lite”, “Big Boss”,
    “Marie Lite”, “Marie Gold”, “CNC”, “Cheese Cracker”, “Snacks Zigzag”, “DON”, “Coconut
    Crunch”.

    The strategy is continued in fresh juice segment where brands such as “Fresh Gold”, “Treat” have
    been supplemented with newly launched “Fresh Fizzy” which is available in 3 pack sizes of 1 litre,
    500 ml. and 250 ml.

    We have till date invested about Rs.86 crores in the brand building exercise and will continue to
    invest in the front end of brands. We are also proposing to conduct an exercise for benchmarking the




                                                     2
    value of Company’s brand portfolio with market value to unlock intrinsic value. The strength of the
    brand will be leveraged for all the new initiatives proposed by the Company.

•   Intellectual Property Rights (IPRS)

    As the Company has developed several brands, it has also created different recipes in respect of its
    large product port folio. We are proposing to initiate process to protect and safeguard the IPR’s by
    creating a system to tackle the issue of unauthorized use of the recipes by any other market
    participants.

Thus the company’s manifesto is to build on the present strength created over the years and diversify into products
and geographic portfolio. We aim at achieving profitable growth by penetrating into the consumption market to
enhance market share by constantly innovating on product profile, investing in infrastructure thereby accelerating
the top line growth to enhance the market share.

Our Competitive Strengths

Established brand name

Our umbrella brand “Priyagold” is one of the leading brands in biscuits manufacturing across the
country which is supported by popular trade mark “Hak Se Mango”. Since inception,we have
successfully launched several brands such as ‘Butter Bite”, “Marie Lite”, “CNC”, “Big Boss”, “DON”,
“Coconut Crunch”. Continuous investment & relentless efforts to spread the brand has resulted in
increasing the market share.

Strong marketing & distribution network

The credit for the establishment of “Priyagold” brand across the country goes to our strong marketing &
distribution network. Today, we have nearly 83 Consignee Agents/Super Stockists catering to 2157
distributors reaching retail outlets in every part of India..

Our efforts in strengthening the marketing & distribution network are continuous & supported by
aggressive advertising campaign through media, newspapers, promotional events, sponsorships,
participation in melas etc. This has resulted in registering robust growth in sales & market share.

Experienced Management team

We have an experienced, qualified and dedicated management team; many of whom have over 10 years
of experience in their respective fields. Our experienced management and its in-depth understanding of
the market in India will enable us to continue to take advantage of both current and future market
opportunities.




                                                        3
THE ISSUE


 Public Issue aggregating to Rs. 13590.75 lacs:

 Which comprises of fresh issue of                  [•] Equity Shares of Rs.10/- each

 Of which:

 QIB Portion(1):                                    [•] Equity Shares of Rs.10/- each, constituting
                                                    upto     50% of the issue (allocation on
                                                    proportionate basis)

     •    Of which 5% is available for Allocation   [•] Equity Shares of Rs.10/- each (allocation on
          to Mutual Funds [the unsubscribed         proportionate basis)
          portion, if any, in the Mutual Fund
          reservation will be available to QIBs]

     •    Balance for all QIB including Mutual      [•] Equity Shares of Rs.10/- each (allocation on
          Funds                                     proportionate basis)

 Non- Institutional Portion(1):                     [•] Equity Shares of Rs.10/- each, constituting
                                                    upto 15% of the net issue (allocation on
                                                    proportionate basis).

 Retail Portion(1):                                 [•] Equity Shares of Rs.10/- each, constituting
                                                    upto 35% of the net issue (allocation on
                                                    proportionate basis).

 Equity Shares outstanding prior to the Issue:      [•] Equity Shares of Rs.10/- each

 Equity Shares outstanding post the Issue:          [•] Equity Shares of Rs.10/- each

 Objects of the Issue:                              Please refer page no. 22 of this DRHP


(1)Under-subscription, if any, in any of the above categories would be allowed to be met with spillover
inter-se from any other categories, at the sole discretion of the Company and BRLM.




                                                    4
SUMMARY OF RESTATED STATEMENT OF ASSETS AND LIABILITIES- (STANDALONE)

                                                                                               (Rs./ Lacs)
PARTICULARS                        30 SEPT.      31             31         31         31            31
                                     2007      MARCH          MARCH      MARCH      MARCH       MARCH
                                                2007           2006       2005       2004         2003
Fixed Assets
Gross Block                         10908.46       10684.46    6560.96    6288.60    5484.77       3252.07
Less:- Depreciation                  2157.08        1939.47    1554.65    1176.20     721.99        418.10
Net Block                            8751.38        8744.98    5006.31    5112.40    4762.77       2833.97
Capital Work in Progress              649.32         547.15     444.22     244.53       0.00        327.14
Total –A                             9400.70        9292.14    5450.53    5356.93    4762.77       3161.11
Investments- B                       1277.25         872.30     724.99     903.62    1621.65          0.00
Deferred Tax Assets-C                   0.00           0.00       0.00       0.00       0.00          0.00
Current Assets, Loans & Advances
Inventory                            2022.33        2171.17    2447.05    2099.30    1189.04       2735.16
Sundry Debtors                       2023.20        1009.44     698.44     414.90     219.70        177.51
Cash & Bank Balance                   162.49          78.54     174.39      72.61      69.05         54.68
Loans & Advances                      794.56         876.10    1018.10     852.80     936.22        707.93
Total –D                             5002.58        4135.25    4337.98    3439.61    2414.01       3675.27
Total Assets (A+B+C+D)= E           15680.53       14299.69   10513.49    9700.16    8798.43       6836.38
Liabilities and Provision
Secured Loans                        3362.42        3819.41     363.09      10.13       0.00          0.00
Unsecured Loans                      1125.63         972.09     438.36      95.75       0.00          0.00
Deferred Tax Liabilities              683.58         683.58     630.49     673.92     551.13        413.93
Current Liabilities                  2569.99        1693.15    2160.54    2168.34    1786.67        479.94
Provision                             419.76         200.21     253.15     216.16     174.41        101.14
Total- F                             7519.15        7368.44    3845.63    3164.30    2512.21        995.01
Net Worth (E-F)                      7519.15        6931.25    6667.86    6535.86    6286.22       5841.37
Net Worth Represented by
Share Capital                        1798.50        1798.50      69.17      69.17      69.17         69.17
Reserve & Surplus                    5270.65        5132.75    6598.69    6468.54    6220.44       5776.33
Total                                7519.15        6931.25    6667.86    6537.71    6289.61       5845.50
Less:- Miscellaneous Expenditure
(to the extent not written off          0.00           0.00       0.00       1.85       3.39          4.13
or adjusted)
Net Worth                            7519.15        6931.25    6667.86    6535.86    6286.22       5841.37




                                               5
SUMMARY OF RESTATED STATEMENT OF PROFIT AND LOSSES- (STANDALONE)


                                                                                                            (Rs./ Lacs)
PARTICULARS                                      Six
                                              Months                       For the Financial Year Ended
                                               Ending           31         31           31           31       31
                                              30 SEPT.        MARCH      MARCH       MARCH         MARCH    MARCH
                                                2007           2007       2006         2005         2004     2003
INCOME
Sales
Of the products          manufactured    by
company                                        17419.61       26856.95    29536.45    28096.90   19601.31     11452.60
Of the products traded by company                  0.00           0.00        0.00        0.00       0.00       678.24
Other Income                                       0.60          81.15       26.65      125.85     119.60       114.13
Increase / ( Decrease) in Inventory                4.71          36.46      (35.30)     149.58     158.84      1295.29
Total                                          17424.92       26974.56    29527.80    28372.33   19879.75     13540.26


EXPENDITURES
Raw Material Consumed                          12077.50       19409.17    20751.64    18159.84   12550.99      8932.73
Staff Costs                                      389.70         499.07      417.84      364.59     179.87       128.34
Other Manufacturing Expenses                    1544.40        2437.03     2607.64     4381.42    2829.38      2230.81
Administrative Expenses                          291.20         653.29      872.68      615.41     388.24       257.09
Selling & Distribution Expenses                 1929.41        3007.66     4337.28     3991.07    2957.38      1723.75
                                               16232.21       26006.22    28987.08    27512.33   18905.86     13272.72


Earning Before Interest and Tax                 1192.71         968.34      540.72      860.00     973.89       267.54
Depreciation                                     225.64         421.32      393.54      479.48     309.97       141.39
Interest                                          69.72         131.37       27.75       13.09       2.60         4.04
Net profit before tax and extra ordinary
items                                            897.35         415.65      119.43      367.43     661.32       122.12
Provision for Taxation
  Current Tax                                    307.16          75.00       19.25       53.72      80.00        11.00
  Deferred Tax                                     0.00          53.09      (43.44)     122.79     137.20        77.18
  Fringe Benefit Tax                               2.29           3.88        7.76        0.00       0.00         0.00
Net profit before extra ordinary items           587.90         283.67      135.86      190.92     444.12        33.94
Extra ordinary items                               0.00           0.00        0.00        0.00       0.00         0.00
Net profit after extra ordinary items            587.90         283.67      135.86      190.92     444.12        33.94
Adjustment on account of prior period
expenses                                          0.00            0.00        5.70     (57.18)       0.00         0.00
Adjusted Profit                                  587.90         283.67      130.16      248.10     444.12        33.94




                                                          6
SUMMARY OF STATEMENT OF ASSETS AND LIABILITIES – (CONSOLIDATED)
                                                                                            (Rs./ Lacs)
                                    30 SEPT.      31         31         31         31           31
                                      2007      MARCH      MARCH      MARCH      MARCH       MARCH
PARTICULARS
                                                 2007       2006       2005       2004         2003

Fixed Assets
Gross Block                          13377.59   12749.68    8338.55    6448.02    5644.19      3252.07
Less:- Depreciation                   2319.66    2071.53    1604.70    1199.94     738.36       418.10
Net Block                            11057.93   10678.15    6733.85    5248.08    4905.82      2833.97
Capital Work in Progress               694.82     587.90     467.88     678.11       0.00       327.14
Total –A                             11752.75   11266.06    7201.73    5926.19    4905.82      3161.11


Investments- B                           0.00      29.81      17.19     180.24    1592.15         0.00


Deferred Tax Assets-C                    0.00       0.00       0.00       0.00       0.00         0.00


Current Assets, Loans & Advances
Inventory                             3064.42    3095.49    3121.48    2099.30    1189.04      2735.16
Sundry Debtors                        2230.68    1068.14     717.14     414.90     219.70       177.51
Cash & Bank Balance                    237.11      85.62     179.15      76.93      69.09        54.68
Loans & Advances                      1207.84    1162.35     654.16    1291.63     832.06       707.93
Cost of Control                          0.00       5.01       5.01      27.36       5.43         0.00
Total –D                              6740.05    5416.60    4676.94    3910.12    2315.32      3675.27


Total Assets (A+B+C+D)= E            18492.80   16712.47   11895.85   10016.55    8813.30      6836.38


Liabilities and Provision
Secured Loans                         4689.71    5288.56    1745.19     336.41       0.00         0.00
Unsecured Loans                       1314.47    1098.09     459.36      21.00       0.00         0.00
Deferred Tax Liabilities               704.16     704.03     651.20     694.50     568.47       413.93
Current Liabilities                   3520.23    2319.84    2256.34    2235.15    1842.51       563.07
Provision                              482.80     204.43     102.98     220.01     158.17        73.26
Total- F                             10711.37    9614.95    5215.07    3507.07    2569.15      1050.26


Net Worth (E-F)                       7781.43    7097.52    6680.79    6509.48    6244.14      5786.12




                                         7
PARTICULARS                                        30 SEPT.      31         31         31         31         31
                                                     2007      MARCH      MARCH      MARCH      MARCH      MARCH
                                                                2007       2006       2005       2004       2003
Net Worth Represented by
Share Capital                                        1798.50    1798.50      69.17      69.17      69.17      69.17
Reserve & Surplus                                    5982.93    5290.99    6605.78    6436.79    6178.00    5721.08

Minority     Interest(Devika   Food     Products
Pvt.Ltd.)
  Share Capital                                         0.00       0.50       0.50       0.50       0.50       0.00
  Reserves                                              0.00       0.55       0.28       0.03     (0.14)       0.00


Minority Interest ( Surya Fresh Foods Ltd.)
  Share Capital                                         0.00       5.00       5.00       5.00       0.00       0.00
  Reserves                                              0.00       0.90       0.05     (0.16)       0.00       0.00

Minority Interest ( Surya Processed Food (P)
Ltd.)
  Share Capital                                         0.00       1.08       0.00       0.00       0.00       0.00
  Reserves                                              0.00       0.00       0.00       0.00       0.00       0.00
Total                                                7781.43    7097.52    6680.79    6511.33    6247.53    5790.25
Less:- Miscellaneous Expenditure
(to the extent not written off or adjusted)             0.00       0.00       0.00       1.85       3.39       4.13
Net Worth                                            7781.43    7097.52    6680.79    6509.48    6244.14    5786.12




                                                        8
SUMMARY OF STATEMENT OF PROFIT AND LOSSES- (CONSOLIDATED)
                                                                                                                    (Rs./ Lacs)
 PARTICULARS                                    Six
                                               Months                       For the Financial Year Ended
                                                Ending
                                               30 SEPT.       31           31            31           31                31
                                                 2007       MARCH        MARCH         MARCH        MARCH             MARCH
                                                             2007         2006          2005         2004              2003
 INCOME
 Sales
 Of the products manufactured by company        19208.56      29500.01     30032.61     28096.90     19601.31         11452.60
 Of the products traded by company                   0.00         0.00         0.00          0.00           0.00         678.24
 Other Income                                        8.45        85.63        26.27        125.35       119.60           114.14
 Increase / ( Decrease) in Inventory              185.65       (72.62)        91.21        149.58       158.84          1295.29
 Total                                          19402.66      29513.02     30150.09     28371.83     19879.75         13540.27
 EXPENDITURES
 Raw Material Consumed                          13462.14      20919.25     21122.50     18159.82     12550.99           8932.73
 Staff Costs                                      417.01        537.75       433.34        364.59       179.87           128.34
 Other Manufacturing Expenses                    1724.37       2539.06      2623.69      4381.43       2829.38          2230.81
 Administrative Expenses                          319.03        761.56       831.86        592.01       378.77           257.09
 Selling & Distribution Expenses                 2061.06       3388.23      4480.50      3990.58      2959.09           1723.75
                                                17983.61      28145.85     29491.89     27488.43     18898.10         13272.72
 Earning Before Interest and Tax                 1419.05       1367.17       658.20        883.40       981.65           267.55
 Depreciation                                     256.17        503.51       426.66        487.04       315.80           141.39
 Interest                                         138.38        298.57        61.63         13.09           2.87           4.04
 Net profit before tax and extra ordinary
 items                                           1024.50        565.09       169.91        383.27       662.98           122.12
 Provision for Taxation
  Current Tax                                     350.47         72.06         4.93         55.46          63.76          10.17
  Deferred Tax                                       0.00        52.83       (43.31)       126.03       142.35            77.18
  Fringe Benefit Tax                                 2.38         4.28         8.11          0.00           0.00           0.00
 Net profit before extra ordinary items           671.65        435.92       200.18        201.78       456.87            34.77
 Extra ordinary items                                0.00         0.00         0.00          0.00           0.00           0.00
 Net profit after extra ordinary items            671.65        435.92       200.18        201.78       456.87            34.77
 Adjustment on account of prior period
 expenses                                            0.00         0.00         5.70       (57.18)           0.00           0.00
 Adjusted Profit                                  671.65        435.92       194.48        258.96       456.87            34.77


 Minority in Devika Food Products Pvt. Ltd.          0.00         0.27         0.25          0.17          (0.06)          0.00
 Minority in Surya Fresh Foods Ltd.                  0.00         0.82         0.05          0.00           0.00           0.00
 Minority in Surya Processed Food (P) Ltd.           0.00         0.00         0.00          0.00           0.00           0.00
 Surya Food and Agro Ltd.                         671.65        434.82       194.18        258.79       456.93            34.77

The above statements are only a summary of Profit & Loss and Assets & Liabilities statements of our Company for
past period, for details please refer page no. 92 of this DRHP.



                                                      9
B) GENERAL INFORMATION

                                       SURYA FOOD & AGRO LIMITED
                                      (Company Registration No.: 20-14919)
                                 (Corporate Identity No.: U15201UP1992PLC014919 )
[Incorporated as ‘Surya Food & Agro Private Limited” on 26/11/1992 with Registrar of Companies, U.P., Kanpur. The
Company was converted into public limited company and the name of the Company was changed to “Surya Food & Agro
Limited” vide certificate of incorporation dated 27/03/2000]

       Registered Office: D-1, Sector-2, Noida- 201301, District Gautam Budh Nagar, Uttar Pradesh
        Tel.: +91-0120-2552989, 2522939; Fax: +91-0120-2558154; E-mail:investors@priyagold.com;
                                       Website: www.priyagold.com
               Contact Person: Mr. Rajesh Sodhi, Company Secretary & Compliance Officer

   [The registered office of the Company was shifted from C-80 Sector-4, Noida-201301, U.P., India to D-1, Sector-2, Noida-
                                            201301, U.P., India w.e.f. 29/12/1995]

    Registrar of Companies: Registrar of Companies, Uttar Pradesh & Uttarakhand, 37/17, Westscott
                                Building, The Mall, Kanpur – 208001.

                                                          Plants:
             Plant I : Plot No. 1A, Udyog Vihar, Greater Noida, Uttar Pradesh
             Plant II : Plot No.14, Surajpur Dadri Road, Greater Noida, Uttar Pradesh
             Plant III : C-4, Sarojini Nagar, Industrial Area, Lucknow (U.P)
             Plant IV : Plot No. 4311, GIDC, Sachin, Surat (Gujarat)


Board of Directors

The Board of Directors as on date is as under:

 Name                                Designation                                  Status
 Ballabh Prasad Agarwala             Chairman and Managing Director               Executive Director
 Manoj Kumar Agarwal                 Whole-Time Director                          Executive Director
 Navin Kumar Agarwal                 Whole-Time Director                          Executive Director
 Shekhar Agarwal                     Whole-Time Director                          Executive Director
 Pradeep Kumar Jain                  Director                                     Independent Director
 Ram Lakhan Prasad Sinha             Director                                     Independent Director
 Ajay Kumar Ghosh                    Director                                     Independent Director
 Ajay Kumar Raman                    Director                                     Independent Director

Brief Profile of Executive Directors

Shri Ballabh Prasad Agarwala, 59 years, Chairman & Managing Director is the founder Director and
Promoter of the Company. He is having about 35 years of experience in the business and industry. He is a
well known personality in the biscuit manufacturing industry and has received “U.P.Ratan” award for
his entrepreneurship. He is responsible for overall working of the Company and is instrumental in
making strategic decisions of the Company. Under his leadership, the Company has grown manifold and
achieved a “International Quality Crown Award, London 2004” for best quality biscuit manufacturer




                                                             10
Shri Manoj Kumar Agarwal, 38 years, Whole-time Director has about 18 years of experience in the
business and industry. He is a commerce graduate looking after the manufacturing operations and
Quality Control and is instrumental in increasing the overall biscuit manufacturing capacity of the
Company.

ShriNavin Kumar Agarwal, 35 years, Whole-time Director has about 15 years of experience in the
business and industry. He is a commerce graduate looking after the manufacturing operations and
Quality Control of products of the Company.

Shri Shekhar Agarwal, 31 years, Whole-time Director has about 10 years of experience in the business
and industry. He is a commerce graduate responsible for marketing of products as well as financial
matters of the Company. He is instrumental in increasing the overall turnover & profitability of the
Company

For more details on the other directors of our Company, please refer to the section titled “Management”
beginning on page 79 of this DRHP

Company Secretary & Compliance Officer
Mr. Rajesh Sodhi
Surya Food & Agro Limited
D-1, Sector-2, Noida- 201301,
District Gautam Budh Nagar, Uttar Pradesh
Tel.: +91-0120-2552989, 2522939; Fax: +91-0120-2558154;
E-mail:investors@priyagold.com;
Website: www.priyagold.com

Note: The investors’ attention is invited to contact the Compliance Officer in case of any pre-issue/post
issue related problems such as non-receipt of letters of allotment/credit of allotted shares in the
respective beneficiary accounts/refund orders, etc.

Our Bankers

State Bank of India
Overseas Branch
9th Floor, Jawahar Vyapar Bhawan
1 Tolstoy Marg,
New Delhi-110001, India
Tel : 011 23755180, 23374916 Fax : 011 23711580
Email : rm2.04803@sbi.co.in
Contact Person : Mr.D.K.Rudola, AGM & Relationship Manager-II

Issue Management Team:
Book Running Lead Manager to the Issue
Keynote Corporate Services Ltd.
SEBI Registration No.: INM 000003606
4th Floor, Balmer Lawrie Building, J.N.Heredia Marg,
Ballard Estate, Mumbai – 400001.
Tel : +91–22–30266000-3 ; Fax : +91–22–22694323
Website: http://www.keynoteindia.net
E-mail: mbd@keynoteindia.net
Contact Person: Mr. Satish Mangutkar


                                                   11
Registrar to the Issue
Beetal Financial & Computer Services (P) Ltd
SEBI Registration No.: INR 000000262
Beetal House, 3rd Floor, 99 Madangir,
Behind Local Shopping Centre, New Delhi- 110062.
Tel.: +91-011-29961281; Fax: +91-011-29961284
Website: www.beetalfinancial.com
E-mail: surya@beetalfinancial.com
Contact Person: Mr. Punit Mittal

Legal Advisor to the Issue
Vaish Associates
Advocates
803, Tower-A, Signature Towers,
South City – I, NH# 8, Gurgaon – 122001, Haryana
Tel : +91 124 4541000 ; Fax : +91 124 4541010
Email : hitender@vaishlaw.com
Contact Person: Mr. Hitender Mehta

Syndicate Member
[●]

Bankers to the Issue and Escrow Collection Banks
[●]

Brokers to the Issue
All the members of recognized stock exchanges would be eligible to act as the Brokers to the Issue.

Our Auditors
Vinay Aggarwal & Associates
Chartered Accountants
E-67, (L.G.F.),
Greater Kailash-III (Masjid Moth)
New Delhi - 110048
Tel : +91 11 29225738 ; Fax : +91 11 41636506
Email: vinay7@vsnl.com

Appraising Agency

State Bank of India
Overseas Branch
9th Floor, Jawahar Vyapar Bhawan
1 Tolstoy Marg,
New Delhi-110001, India
Tel : 011 23755180, 23374916 Fax : 011 23711580
Email : rm2.04803@sbi.co.in
Contact Person : Mr.D.K.Rudola, AGM & Relationship Manager-II




                                                    12
Statement of Inter se Allocation of Responsibilities for the Issue
Since Keynote Corporate Services Ltd. is acting as sole BRLM to this Issue, distribution of responsibility
and coordination for various activities among the BRLMs is not applicable.

IPO Grading
Credit Analysis & Research Ltd. (CARE) has been appointed for grading of the issue vide letter of
appointment dated 08/10/2007. Grading report is awaited.

Credit Rating
As this is an Issue of Equity Shares, there is no requirement of credit rating for this Issue.

Trustees
As this is an Issue of Equity Shares, appointment of Trustees is not required.


No Offer in the United States
The rights and the shares of our Company are not registered under the United States Securities Act, 1933,
as amended, and the Issue is not, and under no circumstances is to be construed as, an offering of any
shares or rights for sale in the United States of America or the territories or possessions thereof.

Book Building Process
The Book Building Process refers to the process of collection of Bids, on the basis of the Red Herring
Prospectus, within the Price Band. The Issue Price is fixed after the Bid/Issue Closing Date.
The principal parties involved in the Book Building Process are:

(1)   The Company;
(2)   The Book Running Lead Manager, in this case being Keynote Corporate Services Limited;
(3)   The Syndicate Member who are intermediaries registered with SEBI or registered as brokers with
      BSE/NSE and eligible to act as underwriters. Syndicate Members are appointed by the BRLM;
(4)   The Registrar to the Issue in this case being Beetal Financial & Computer Services (P) Ltd; and
(5)   Escrow Collection Banks
The Equity Shares are being offered to the public through the 100% Book Building Process in accordance
with the SEBI Guidelines, wherein upto 50% of the Net Issue shall be allocated on a proportionate basis to
QIBs, including up to 5% of the QIB Portion that shall be available for allocation on a proportionate basis
to Mutual Funds only and the remainder of the QIB Portion shall be available for Allocation on a
proportionate basis to all QIB Bidders, including Mutual Funds. Further, upto 15% of the Net Issue shall
be available for allocation on a proportionate basis to the Non-Institutional Bidders and upto 35% of the
Net Issue shall be available for allocation on a proportionate basis to Retail Individual Bidders, subject to
valid Bids being received at or above the Issue Price.

In accordance with SEBI Guidelines, QIBs are not allowed to withdraw their Bid(s) after the Bid/ Issue
Closing Date. In addition, as per the present SEBI Guidelines, QIBs are required to pay 10% Margin
Amount upon submission of the Bid cum Application Form during the Bidding Period and allocation
to QIBs will be on a proportionate basis. For further details see section titled “Issue Structure`” on page
155.




                                                      13
The Company shall comply with the SEBI Guidelines and any other directions issued by SEBI for this
Issue. In this regard, the Company has appointed Keynote Corporate Services Limited as the Book
Running Lead Manager to manage the Issue and to procure the subscriptions to the Issue.

Illustration of Book Building and Price Discovery Process

(Investors may note that this illustration is solely for the purpose of easy understanding and is not specific to the
Issue.)

Bidders can bid at any price within the price band. For instance, assuming a price band of Rs.40 to Rs.48
per share, issue size of 6,000 equity shares and receipt of nine bids from bidders, details of which are
shown in the table below, the illustrative book would be as below. A graphical representation of the
consolidated demand and price would be made available at the bidding centers during the bidding
period. The illustrative book as shown below indicates the demand for the shares of the company at
various prices and is collated from bids from various investors.

     Number of equity                                      Cumulative equity
      shares bid for              Bid Price (Rs.)             shares bid                   Subscription
           500                          48                         500                          8.33%
           700                          47                       1,200                         20.00%
         1,000                          46                       2,200                         36.67%
           400                          45                       2,600                         43.33%
           500                          44                       3,100                         51.67%
           200                          43                       3,300                         55.00%
         2,800                          42                       6,100                        101.67%
           800                          41                       6,900                        115.00%
         1,200                          40                       8,100                        135.00%

The price discovery is a function of demand at various prices. The highest price at which the issuer is able
to issue the desired quantum of shares is the price at which the book cuts off i.e. Rs.42 in the above
example. The issuer, in consultation with the BRLM will finalize the issue price at or below such cut-off
price i.e. at or below Rs.42. All bids at or above this issue price and cut-off bids are valid bids and are
considered for allocation in respective category.

Steps to be taken for Bidding:
1.       Check eligibility for making a Bid (see “Issue Procedure- Who Can Bid” on page no.158 of this
         Draft Red Herring Prospectus);
2.       Ensure that the Bidder has a demat account and the demat account details are correctly
         mentioned in the Bid cum Application Form;
3.       Ensure that you have mentioned your PAN and attached copies of your PAN to the Bid cum
         Application Form; and
4.       Ensure that the Bid cum Application Form is duly completed as per instructions given in this
         Draft Red Herring Prospectus and in the Bid cum Application Form.

Bidding Period/Issue Period

 BID/ISSUE OPENS ON                                                            [●]
 BID/ISSUE CLOSES ON                                                           [●]

Bids and any revision in Bids shall be accepted only between 10 a.m. and 3 p.m. (Indian Standard Time)
during the Bidding Period as mentioned above at the bidding centers mentioned on the Bid cum



                                                         14
Application Form except that on the Bid /Issue Closing Date, the Bids shall be accepted only between 10
a.m. and 1 p.m. (Indian Standard Time) and uploaded until such time as permitted by the BSE and the
NSE on the Bid /Issue Closing Date. Bids will only be accepted on working days i.e. Monday to Friday
(excluding any public holidays).
The Company reserves the right to revise the Price Band during the Bidding Period in accordance with
SEBI Guidelines. The cap on the Price Band shall not be more than 20% of the floor of the Price Band.
In case of revision in the Price Band, the Issue Period will be extended for three additional days after
revision of Price Band subject to the Bidding Period/Issue Period not exceeding 10 working days. Any
revision in the Price Band and the revised Bidding Period/Issue Period, if applicable, will be widely
disseminated by notification to the BSE and the NSE, by issuing a press release, and also by indicating the
change on the web sites of the BRLM and at the terminals of the Syndicate.

Underwriting Agreement
After the determination of the Issue Price but prior to filing of the Prospectus with ROC, the Company
proposes to enter into an Underwriting Agreement with the Underwriter for the Equity Shares proposed
to be offered through this Issue. It is proposed that pursuant to the terms of the Underwriting
Agreement, the BRLM shall be responsible for bringing in the amount devolved in the event that the
Syndicate Member does not fulfill its underwriting obligations. Pursuant to the terms of the
Underwriting Agreement, the obligations of the Underwriter are subject to certain conditions, as specified
therein.

The Underwriter has indicated its intention to underwrite the following number of Equity Shares:
(This portion has been intentionally left blank and will be completed prior to filing of the Prospectus with ROC)

 Name and Address of the Underwriter                Indicative Number of            Amount Underwritten
                                                     Equity Shares to be                (Rs. lacs)
                                                        Underwritten
                      [●]                                     [●]                              [●]

The amounts mentioned above are indicative and this would be finalized after determination of Issue
Price and actual allocation of the Equity Shares. The Underwriting Agreement is dated [●].
In the opinion of the Board of Directors (based on a certificate given to them by BRLM and the Syndicate
Member), the resources of the Underwriter are sufficient to enable it to discharge its underwriting
obligations in full. The above-mentioned Underwriter is registered with SEBI under Section 12(1) of the
SEBI Act or registered as broker with the Stock Exchange[s] or as Merchant Banker with SEBI.
The Underwriter shall be responsible for ensuring payment with respect to the Equity Shares allocated to
investors procured by them. In the event of any default, the Underwriter in addition to other obligations
to be defined in the Underwriting Agreement, will also be required to procure/ subscribe to the extent of
the defaulted amount.




                                                         15
C.) CAPITAL STRUCTURE OF THE COMPANY

                                                                                         (Rs. in Lacs)
         Number        Description of Shares                       Face    Nominal    Aggregate
         of Shares                                                 Value     Value       Value
    A.   Authorised Capital
         3,00,00,000   Equity Shares of Rs.10/- each               10       3000.00     3000.00


    B.   Issued, Subscribed and Paid up Capital before the
         Issue
         1,79,84,980   Equity Shares of Rs.10/- each, fully paid   10       1798.50     1798.50
                       up.


    C.   Present Issue in terms of this DRHP
                 [●]   Equity Shares of Rs. 10/- each at a         10           [●]         [●]
                       Premium of Rs. [●] per share


    D.   Equity Share Capital after the Issue
                 [●]   Equity Shares, fully paid up                10           [●]         [●]


    E.   Share Premium Account
                       - Before the Public Issue                   -           Nil          Nil
                       - After the Public Issue                    -           [●]          [●]




                                                   16
Notes forming part of the Capital Structure:
1.   Details of Increase in Authorized Equity Share Capital divided in Equity Shares of Rs. 10/- each

                 Date of change                Authorised           Face         No. of
                                                    Capital        Value         Shares
                                               (Rs. in lacs)        (Rs.)
          At Incorporation                                25.00            10              2,50,000
          23/07/1993                                      40.00            10              4,00,000
          05/06/2000                                     100.00            10             10,00,000
          30/12/2003                                     250.00            10             25,00,000
          08/03/2007                                    3000.00            10        3,00,00,000


2.   The existing share capital has been subscribed and allotted as under:

           Allotment         No. of     Cumulative       Face      Issue        Consid-       Cumula-         Nature for
              Date           equity      Total of       Value      Price        eration         tive          Allotment
                             shares       equity                   (Rs.)                      Capital
                                          shares                                              (in lacs)
      26/11/1992                 200            200       10        10      Cash                      0.02   Signatories
                                                                                                             to the MOA
      07/08/1993              370000        370200        10        10      Cash                  37.02      Issue         to
                                                                                                             Promoters &
                                                                                                             other     body
                                                                                                             corproates.
      27/03/2002              190530        560730        10         -      Other                 56.07      See note 1
                                                                            than cash
      29/03/2003              131000        691730        10         -      Other                 69.17      See note 2
                                                                            than cash
      10/03/2007             17293250     17984980        10         -      Bonus               1798.50      In the ratio
                                                                                                             of 25:1


     Note:
     1. Issued to shareholders of “Fasten Trading Ltd.” and “Priya Proteins Pvt. Ltd.” on merger with
            Surya Food & Agro Ltd in 2002
     2.     Issued to shareholders of “Priyagold Industries (India) Ltd.” and “Kanhaiya Exports Pvt. Ltd.”
            on merger with Surya Food & Agro Ltd in 2003

3.   Promoters Contribution & Lock-in:

     Pursuant to the SEBI Guidelines, an aggregate of 20% of the post issue paid up equity share capital of
     the Company held by the Promoters shall be locked-in for a period of three years from the date of



                                                              17
    Allotment in the Issue and the balance shares held by the promoters/ promoter group shall be locked
    in for one year.

    The details of the build up of the Promoters’ shareholding, Promoters’ contribution and lock in are as
    follows:

Promoters:

Name of the       Date of         Date when     Consideration      No. of          Issue/         % of     Lock-in
  Promoter      Allotment/        made fully                      shares of       Purchase        Post     period
                 Transfer          paid-up                        Rs. 10/-         Price          Issue
                                                                    each                         paid-up
                                                                                                 capital
Ballabh          26/11/1992        26/11/1992              Cash            100              10       [●]       [●]
Prasad           07/08/1993        07/08/1993              Cash     1,00,000                10       [●]       [●]
Agarwala         27/03/2002        27/03/2002              Cash       12,888                10       [●]       [●]
                 29/03/2003        29/03/2003              Cash            250              10       [●]       [●]
                 31/03/2004        31/03/2004              Cash       13,832                10       [●]       [●]
                 04/12/2006        04/12/2006              Cash            500              10       [●]       [●]
                 10/03/2007        10/03/2007             Bonus    31,89,250                 -       [●]       [●]
                                                                            [●]                      [●]    Three
                            Sub Total
                                                                            [●]                      [●]      One
Manoj Kumar      31/03/1994        31/03/1994              Cash       25,000                10       [●]       [●]
Agarwal          27/03/2002        27/03/2002              Cash        2,346                10       [●]       [●]
                 29/03/2003        29/03/2003              Cash     1,29,050                10       [●]       [●]
                 01/09/2004        01/09/2004              Cash       10,100                10       [●]       [●]
                 10/03/2007        10/03/2007             Bonus    41,62,400                 -       [●]       [●]
                                                                            [●]                      [●]    Three
                            Sub Total
                                                                            [●]                      [●]      One
Navin Kumar      31/03/1994        31/03/1994              Cash       25,000                10       [●]       [●]
Agarwal          27/03/2002        27/03/2002              Cash        2,393                10       [●]       [●]
                 29/03/2003        29/03/2003              Cash              50             10       [●]       [●]
                 31/03/2004        31/03/2004              Cash       46,931                10       [●]       [●]
                 01/09/2004        01/09/2004              Cash       18,810                10       [●]       [●]
                 10/03/2007        10/03/2007             Bonus    23,29,600                 -       [●]       [●]
                                                                            [●]                      [●]    Three
                            Sub Total
                                                                            [●]                      [●]      One
Shekhar          31/03/1994        31/03/1994              Cash       30,000                10       [●]       [●]
Agarwal          27/03/2002        27/03/2002              Cash        2,726                10       [●]       [●]
                 29/03/2003        29/03/2003              Cash              50             10       [●]       [●]




                                                     18
                31/03/2004     31/03/2004               Cash       55,555         10        [●]       [●]
                01/09/2004     01/09/2004               Cash       15,958         10        [●]       [●]
                10/03/2007     10/03/2007              Bonus    26,07,225          -        [●]       [●]
                                                                       [●]                  [●]    Three
                        Sub Total
                                                                       [●]                  [●]      One


Promoter Group:

Usha Devi       04/03/1995     04/03/1995               Cash       15,000         10        [●]      One
Agarwala        27/03/2002     27/03/2002               Cash        2,151         10        [●]      One
                29/03/2003     29/03/2003               Cash           50         10        [●]      One
                31/03/2004     31/03/2004               Cash       15,718         10        [●]      One
                10/03/2007     10/03/2007              Bonus     8,22,975          -        [●]      One
                        Sub Total                                8,55,894                   [●]      One
Bina Agarwal    17/03/1995     17/03/1995               Cash       25,000         10        [●]      One
                29/03/2003     29/03/2003               Cash           50         10        [●]      One
                10/03/2007     10/03/2007              Bonus     6,26,250          -        [●]      One
                        Sub Total                                6,51,300                   [●]      One
Chhavi          31/03/2004     31/03/2004               Cash       70,000         10        [●]      One
Agarwal         10/03/2007     10/03/2007              Bonus    17,50,000          -        [●]      One
                        Sub Total                               18,20,000                   [●]      One
Nidhi           31/03/2004     31/03/2004               Cash       72,222         10        [●]      One
Agarwal         10/03/2007     10/03/2007              Bonus    18,05,550          -        [●]      One
                        Sub Total                               18,77,772                   [●]      One
                       Grand Total                             1,79,84,980                  [●]


   All Equity Shares, which are being locked-in are eligible for computation of promoter’s contribution
   and lock-in under Clause 4.6 of the SEBI Guidelines.

   As per clause 4.15.1 of the SEBI Guidelines, the locked-in Equity Shares held by the Promoter
   can be pledged only with banks or financial institutions as collateral security for loans granted by
   such banks or financial institutions, provided the pledge of shares is one of the terms of sanction of
   loan.

   Under Clause 4.16.1(a) of the SEBI Guidelines, the Equity Shares held by persons other than the
   Promoter prior to the Issue may be transferred to any other person holding the Equity Shares which
   are locked-in as per Clause 4.14 of the SEBI Guidelines, subject to continuation of the lock-in in the
   hands of the transferees for the remaining period and compliance with SEBI Takeovers Regulations.

   Further, under Clause 4.16.1(b) of the SEBI Guidelines, the Equity Shares held by the Promoter may
   be transferred to and amongst the Promoter group or to a new Promoter or persons in control of the
   Company subject to continuation of the lock-in in the hands of the transferees for the
   remaining period and compliance with SEBI Takeover Regulations.



                                                  19
4.   Shareholding Pattern of our Company
     The table below presents our shareholding pattern before the proposed Issue and as adjusted for the
     Issue:

     Name of Shareholder                Pre-Issue (As on the date of               Post-Issue
                                         filing of this DRHP with
                                                   SEBI)
                                        Number of       Percentage         Number of        Percentage
                                          Equity        equity share         Equity         equity share
                                          Shares        capital (%)          Shares         capital (%)
     Promoters:
     Ballabh Prasad Agarwala                33,16,820           18.44         33,16,820              [●]
     Manoj Kumar Agarwal                    43,28,896           24.07         43,28,896              [●]
     Navin Kumar Agarwal                    24,22,784           13.47         24,22,784              [●]
     Shekhar Agarwal                        27,11,514           15.08         27,11,514              [●]
     Promoter Group:
     Usha Devi Agarwal                       8,55,894            4.76          8,55,894              [●]
     Bina Agarwal                            6,51,300            3.62          6,51,300              [●]
     Chhavi Agarwal                         18,20,000           10.12         18,20,000              [●]
     Nidhi Agarwal                          18,77,772           10.44         18,77,772              [●]
                           Sub Total      1,79,84,980          100.00       1,79,84,980              [●]
     Public                                         -                  -              [●]            [●]
                               Total      1,79,84,980          100.00                 [●]            100


5.   We, nor our Directors / Promoter / Promoter Group, nor their respective Directors and the BRLM
     have entered into any buy-back and/or standby or similar arrangements for purchase of Equity
     Shares from any person.

6.   The list of top ten shareholders and the number of equity shares held by them is as under:

     Top shareholders of Company as of the date of the filing of this Draft Red Herring Prospectus with
     SEBI are as follows:

      Sr. No.   Name                                                       No. of Shares      % to Total
      1         Shri Ballabh Prasad Agarwala                                  33,16,820          18.44
      2         Shri Manoj Kumar Agarwal                                      43,28,896          24.07
      3.        Shri Shekhar Agarwal                                          27,11,514          15.08
      4.        Shri Navin Kumar Agarwal                                      24,22,784          13.47



                                                   20
      5.        Smt.Nidhi Agarwal                                            18,77,772          10.44
      6.        Smt.Chhavi Agarwal                                           18,20,000          10.12
      7         Smt.Usha Devi Agarwal                                            8,55,894        4.76
      8         Smt.Bina Agarwal                                                 6,51,300        3.62
                Total Equity Shares                                        1,79,84,980         100.00


     Top shareholders of Company as of ten days prior to the filing of this Draft Red Herring Prospectus
     with SEBI are as follows:

      Sr. No.   Name                                                     No. of Shares       % to Total
      1         Shri Ballabh Prasad Agarwala                                 33,16,820          18.44
      2         Shri Manoj Kumar Agarwal                                     43,28,896          24.07
      3         Shri Shekhar Agarwal                                         27,11,514          15.08
      4         Shri Navin Kumar Agarwal                                     24,22,784          13.47
      5         Smt.Nidhi Agarwal                                            18,77,772          10.44
      6         Smt.Chhavi Agarwal                                           18,20,000          10.12
      7         Smt.Usha Devi Agarwal                                            8,55,894        4.76
      8         Smt.Bina Agarwal                                                 6,51,300        3.62
                Total Equity Shares                                        1,79,84,980         100.00


     Top shareholders of Company as of 2 years prior to the filing of this Draft Red Herring Prospectus
     with SEBI are as follows:

      Sr. No.   Name                                                     No. of Shares      % to Total


      1         Shri Manoj Kumar Agarwal                                         1,66,496       24.07
      2         Shri Ballabh Prasad Agarwala                                     1,27,570       18.44
      3         Shri Shekhar Agarwal                                             1,04,289       15.08
      4         Shri Navin Kumar Agarwal                                          93,184        13.47
      5         Smt.Nidhi Agarwal                                                 72,222        10.44
      6         Smt.Chhavi Agarwal                                                70,000        10.12
      7         Smt.Usha Devi Agarwal                                             32,919         4.76
      8         Smt.Bina Agarwal                                                  25,050         3.62
                Total Equity Shares                                              6,91,730      100.00

7.   All shares issued since the date of incorporation of the Company are fully paid up.

8.   There has been no revaluation of assets of the Company in the last 5 FYs.



                                                    21
9.   The Company has not availed of any bridge loans to be repaid from the proceeds of the issue.

10. The Company has not issued any equity shares out of revaluation reserves. The Company has issued
    190530 equity shares of Rs. 10/- each to the shareholders of “Fasten Trading Ltd.” and “Priya
    Proteins Pvt. Ltd.” on 27/03/2002 pursuant to merger with Surya Food & Agro Ltd. & 131000 equity
    shares of Rs. 10/-each to the shareholders of “Priyagold Industries (India) Ltd.” and “Kanhaiya
    Exports Pvt. Ltd.” on 29/03/2003 pursuant to merger with Surya Food & Agro Ltd., for consideration
    other than cash. The Company has made Bonus Issue of Equity Shares on 10/03/2007 as per the
    capital structure above.

11. There are no buyback, standby or similar arrangement for purchase of Equity Shares offered through
    this DRHP by the Promoter Group, directors and the Lead Managers.

12. The total number of shareholders / members of the Company as on date are 8.

13. The Company has allotted 1,72,93,250 equity shares of Rs.10/- each as bonus shares on 10/03/2007 in
    the ratio of Twenty Five equity shares for every one equity share held (i.e. 25:1) to the existing
    shareholders by capitalizing its free reserves. Besides this, the Directors, Promoters and Promoter
    Group of the Company have not entered into any purchase or sale transactions of the Company’s
    shares in the last six months.

14. The Shareholders of the Company do not hold any warrant, options, convertible loan or any
    debenture, which would entitle them to acquire further Shares of the Company.

15. There shall be only one denomination of the equity shares of the Company unless otherwise
    permitted by law. The Company shall comply with disclosure and accounting norms as may be
    specified by SEBI from time to time.

16. The Company has not granted Equity Options to its employees.

17. There would be no further issue of capital whether by way of issue of bonus shares, preferential
    allotment, and rights issue or in any other manner during the period commencing from submission
    of this Draft Red Herring Prospectus with SEBI until the Equity Shares to be issued pursuant
    to the Issue have been listed. However our company is considering the pre- IPO placement of certain
    equity shares with certain investors, prior to the completion of the issue. In such a case the issue size
    offered to the public would be reduced to the extent of such pre- IPO placement subject to such
    minimum issue size of the post issue capital being offered to the public as may be permited.

18. We do not presently intend or propose to alter our capital structure for a period of six months from
    the Bid/Issue Opening Date, by way of split or consolidation of the denomination of Equity Shares or
    further issue of Equity Shares (including issue of securities convertible into or exchangeable, directly
    or indirectly for Equity Shares) whether preferential or otherwise. However, if business needs of the
    Company so require, the Company may alter the capital structure by way of split/ consolidation of
    the denomination of the shares/ issue of shares on a preferential basis or issue of bonus or rights or
    public issue of shares or any other securities whether in India or abroad during the period of six
    months from the date of listing of the Equity Shares issued under this DRHP or from the date the
    application moneys are refunded on account of failure of the Issue, after seeking and obtaining all the
    approvals which may be required for such alteration

19. The entire issue price is to be paid on application. Hence, there will be no partly paid up shares
    arising out of this issue.




                                                     22
D) PARTICULARS OF THE ISSUE

A. Object of the Issue

   We propose the present Initial Public Offer (IPO):

   1. To finance expansion of our manufacturing capacity of biscuits from its existing 85000 MT per
      annum to 149500 MT per annum.
   2. To meet working capital requirement
   3. To meet the expenses of the issue
   4. To invest in the subsidiary company for
         a) Setting up of a Condensed Milk Plant of 9051 MT p.a. capacity
         b)Setting up of a Chocolate Plant of 6540 MT p.a. capacity
   5. To enable listing of the equity shares of the company on the stock exchanges.

The Objects Clause of the Memorandum and Articles of Association of the Company enable it to
undertake the activities for which the funds are to be raised in the present Public Issue. Further, it is
confirmed that the activities, which the company has been carrying out until now is in accordance with
the object clause of Memorandum and Articles of Association of the Company.

B. Funds requirement and Means of Finance
                                                                                              (Rs. In lacs)
         Particulars                                                             Amount            Amount
   1     Expansion of “Biscuit” manufacturing facility
                  Building & Civil Work                                            1443.49
                  Plant & Machinery                                                1814.31
                  Utilities & Misc. Fixed Assets                                     41.00
                  Pre-Operative Exp.                                                329.88
                  Contingencies & Escalations                                       329.88           3958.56
   2     Working Capital requirement                                                                 2979.52
   3     Public Issue Expenses                                                                       1000.00
                                       Total A                                                       7938.08
   4     Investment in our Subsidiary company i.e. Surya Processed                                   5852.67
         Food Pvt. Ltd. for setting up of Condensed Milk plant and
         Chocolate Plant
                                       Total B                                                      5852.67
                           Total Funds requirement (A+B)                                           13790.75

Means of Finance
                                                                                             (Rs. In lacs)
 Particulars                                                                                       Amount
 Equity Share Capital including premium                                                             13590.75
 Term Loan                                                                                            200.00
 Total means of finance                                                                             13790.75

The Cost of Project for our expansion in biscuit manufacturing facility to the extent of Rs.7938.08 lacs has
been appraised by our Banker, State Bank of India, Overseas branch, New Delhi who have sanctioned
Rs.200 lacs as term loan to part finance the project.




                                                    23
C. Break up of Cost of Project

The break-up of cost of project as appraised by State bank of India, Overseas Branch, New Delhi is as
follows:

1. Expansion of Existing Biscuit Manufacturing facility

  We proposes to increase our manufacturing capacity from 85,000 MT p.a. to 149500 MT p.a. by adding
  capacity of 64,500 MT p.a. in our existing plant located at plot A-1, Udyog Vihar, Greater Noida, Uttar
  Pradesh. The total cost for expansion is estimated at Rs.3958.55 lacs. The break up of expenditure to be
  incurred for proposed expansion is as follows:

  a) Building and Civil Works

      We are putting up additional manufacturing capacity on the existing land available at our Greater
      NOIDA facility. The cost for construction of building and other civil work is estimated at Rs.
      1443.49 lacs. We have already deployed Rs.649.32 lacs towards construction of building (for details
      please refer para on Sources & Deployment of funds). The break up of the expenditure to be
      incurred is as follows:
                                                                                        (Rs. in Lacs)
       Description Area                                       Sq.Ft Rate per Sq.Ft.             Amount
       RCC Sheds ( 120 Mts x 60 Mts) for Basement             77503               600             465.01
       RCC Sheds ( 200 Mts x 60 Mts) for Ground Floor        129171               600             775.03
       Office Building , Canteen Laboratory                    9688              600               58.13
       (15 Mts x 60 Mts)
       Office Building, Canteen Laboratory (furnishing)        9688             1500              145.32
       ( 15 Mts x 60 Mts)
                                            Total                                                1443.49

  b) Plant and Machinery

      The cost of plant and machinery to be purchased for the expansion project is Rs. 1814.31 lacs. The
      break up for the same is as follows.
                                                                                        (Rs. in Lacs)
        Sr. Name of Machine                                 Qty        Rate per unit            Amount
        No.
          1   Vanaspati Storage Tank(70 Tonnes)               2                  7.50              15.00
          2   Glucose Mixing Tank (30 Tonnes )                1                  6.00                6.00
          3   Sugar Syrup Tank (10Tonnes)                     1                  3.00                3.00
          4   Furnace Oil Tank (50Tonnes)                     1                  2.00                2.00
          5   Biscuit Grinder                                 2                  1.00                2.00
          6   Sugar Grinder System (Meranda)                  1               100.00              100.00
          7   Peter Creams PT4                                3                 58.00             174.00
          8   Vanaspati Handling System Meranda               1                 70.00              70.00
          9   Mixure Cream Feeding System                     5                 40.00             200.00
         10 Material Handle System Maida                      1                 80.00              80.00
         11 Cream Preparing System                            1               150.00              174.72
         12 Metal Detector                                    5                  1.50                7.50
         13 Biscuit Dies                                      5                  0.40                2.00
         14 Cooling Conveyor                                  5                  2.00              10.00



                                                   24
       15    Furnace Oil Burner                               28                   1.35              37.80
       16    Weighing Machine 2 Kgs                            10                  0.08               0.75
       17    Weighing Machine 200 Kgs                          2                   0.20               0.40
       18    Weinghing Machine 600 Kgs                          2                  0.50               1.00
       19    Laboratory Equipments                             1                  10.00              10.00
       20    Floor washing , Mopping M/c(Motor)                 1                  1.00               1.00
       21    Thermo Fluid BoilerHot Water                       1                  4.05               4.05
       22    Electrical 440 volts                              1                  90.00              90.00
       23    Electrical 220 volts                              1                  15.00              15.00
       24    Consumable Stores                                 1                  10.00              10.00
       25    Dough Mixture 500 kgs                             5                  13.50              78.62
       26    Rotary Cutting Plant                              1                  50.00              58.24
       27    Rotary Moulding Plant                             4                   6.00              27.96
       28    Ovan (200' x 48") with Band                       4                  42.00             195.69
       29    Ovan (150' x 48") with Band                       1                  30.00              34.94
       30    Packing Machine                                  20                   8.00             160.00
       31    Plastic Crates                                   300                  0.00               1.07
       32    Air Compressor                                    2                   5.54              12.90
       33    Pallet Track (Material Handling)                  5                   0.19               1.10
       34    Cream Preparing System                            1                 150.00             174.72
             Total                                                                                 1761.46
             Add: 3% for Sales Taxes etc                                                             52.84
             GRAND TOTAL                                                                           1814.31

     We have placed orders for majority of above machineries.

c)   Utilities and Miscellaneous Fixed Assets

      Sr.    Particulars                                            Qty          Rate     Amount
      No.                                                                    (in lacs)    (in lacs)
       1    Vehicle for Delivery                                    5             6.00       30.00
       2    Fire Extinguishers                                      1           10.00        10.00
       3    Water Tank                                              2             0.50         1.00
            TOTAL                                                                            41.00

d) Pre-Operative Expenses

     We require funds for certain pre-operative expenses such as project report preparation, Interest
     during implementation, start up expenses, insurance, legal expenses, etc. The total requirement is
     estimated at Rs. 329.88 Lacs.

e) Contingencies & Escalation

     A contingency & escalation provision of 10% of capital assets cost of Rs. 3298.80 lacs i.e. Rs. 329.88
     Lacs is provided for.




                                                   25
2. Working Capital Requirement

  The total working capital requirement of Company is estimated at Rs. 5479.52 Lacs as appraised by our
  Banker, State Bank of India, considering the existing and proposed enhanced capacity based on the
  calculations for the first year of operations i.e. 2008-09 after the implementation of project. The details
  of which are as follows:

       S.No.    Particulars                                          Days          Amount
                                                                                (Rs.in Lacs)
          1     Raw Material & Packg. Material:-
                For Proposed Unit                                     15              750.16
                For Existing Unit                                     15              943.60
          2     Goods in Process :-
                For Proposed Unit                                      3              150.03
                For Existing Unit                                      3              180.30
          4     Finished Goods
                For Proposed Unit                                      7              419.07
                For Existing Unit                                      7              527.13
          5     Debtors
                For Proposed Unit                                     15              952.83
                For Existing Unit                                     15            1198.53
          6     Working Expenses
                a)Manpower
                For Proposed Unit                                     30               94.00
                For Existing Unit                                     30              118.24
                b) Power & Fuel
                For Proposed Unit                                     30               64.50
                For Existing Unit                                     30               81.13
                Total                                                               5479.52
        Less:   Bank Funding                                                        1500.00
        Less:   Available Margin                                                    1000.00
                Net working capital requirement                                     2979.52

  We have a sanction of working capital limits to the extent of Rs.1500.00 lacs from State Bank of India,
  Overseas branch, New Delhi.

3. Public Issue Expenses

  The Issue expenses includes the expenses for the current Public Issue inter-alia including travelling,
  management fees, printing and distribution expenses, commission, legal fees, regulatory fees,
  advertisement expenses and Processing fees & listing fees payable to the stock exchanges, among
  others. The total issue expenses are estimated to be approximately 7.27% of the total proceeds of this
  Public Issue.




                                                    26
  Schedule of implementation
  The proposed schedule of implementation for the projects is detailed below:
   Sr.   Activity                  Commencement          Completion             Status
   No.
   1     Land                      -                     -                      Already in possession
   2     Factory Building      &   Commenced             December 2007          Commenced
         Civil Work
   3     Plant & Machinery         October 2007          December 2007          Identified and order
                                                                                is placed for major
                                                                                machineries
   4     Erection of Equipment     January 2008          February 2008          Will be commenced
                                                                                after completion of
                                                                                installation of plant.
   5     Trial Run                 February 2008         -                      -
   6     Commencement        of    March 2008            -                      -
         commercial production

4. Investment in the subsidiary company
  We propose to invest Rs. 5852.67 lacs in our 100% subsidiary namely Surya Processed Food Private
  Ltd. (SPFPL) by way of equity participation and subscription to 4% non convertible debenture. The
  structure of investment in the subsidiary company will be as follows:

   Sr.   Nature of investment                                   Amount
   No.                                                       (Rs.in Lacs)
   1     1,85,26,700 equity shares of Rs.10/- each for            1852.67
         cash at par
   2     40,00,000, 4% non convertible debentures of             4000.00
         Rs.100/- each (Unsecured)
         Total                                                   5852.67

  Our subsidiary, SPFPL presently has an authorized capital of Rs.6 crores comprising of 60,00,000
  equity shares of Rs.10/- each. SPFPL will increase the authorized capital to the desired levels by
  passing appropriate resolutions & complying with ROC formalities.

  The above funds will be deployed by SPFPL for setting up Condensed Milk plant and Chocolate plant
  at Haridwar, Ranipur, Uttaranchal. The Cost of project and means of finance for both the plants are as
  follows:
                                                                                       (Rs. in Lacs)
   Sr.    Particulars                                   Condensed        Chocolate             Total
   No.                                                   Milk plant           Plant         Amount
                                                           Amount          Amount
   Cost of Project
   1      Land                                                    -          320.00           320.00
   2      Building & Civil work                              271.00          693.11           964.11
   3      Plant & Machinery                                  477.00          560.72          1037.72
   4      Utilities and Misc. Fixed Assets                   232.00          159.77           391.77
   5      Pre-operative Exp.                                  25.00          192.14           217.14
   6      Working Capital                                   1341.00         1965.89          3306.89
   7      Contingencies and Escalation                            -          215.04           215.04
          Total                                             2346.00         4106.67          6452.67


                                                   27
 Means of Finance
 1    Equity Share Capital                                   546.00             1306.67          1852.67
 2    4% Non Convertible Debentures                         1500.00             2500.00          4000.00
 3    Term Loan                                              300.00              300.00           600.00
      Total                                                 2346.00             4106.67          6452.67
SPFPL has applied to the State Bank of India, Overseas branch, New Delhi for appraisal of the above
proposed projects and sanction of term loan to the extent of Rs.600.00 lacs to part finance the same.

Break up of above Cost of Project is as follows:

   Land

   SPFPL has acquired 33920 sq.mtrs of land situated at Integrated Industrial Estate, BHEL, Ranipur,
   Dist. Haridwar, Uttaranchal from State Infrastructure & Industrial Development Corporation of
   Uttaranchal Ltd. (SIDCUL) for 90 years lease. The cost for acquisition of the said land was
   Rs.199.45 lacs. The balance money of Rs.120.55 lacs will be deployed on development of land,
   construction of road etc. since the land is located in non developed area.
   The details of plot & lease arrangement are as follows:

     Plot No.                     Plot No. -5 , Sector -11, BHEL
     Plot Area                    33920 sq. mtr.
     Date of Lease Agreement      25/05/2007
     Lease Rent                   Rs.5/- per sq.mtr. i.e. Rs.1,69,600/-

   Building & Civil Work
   For Condensed Milk Plant

     Particulars                                             Sq. Ft.        Rate per         Amount
                                                                              Sq.ft.      (Rs. in lacs)
                                                                               ( Rs.)
     RCC Shed (Milk receiving , Processing,Cream                  9038           500             45.19
     Handling, Butter making,Powder Recombination/
     sugar dissoving,CIP,Laborateries)
     RCC Shed (Sweetend condensed milk)                        2582               750            19.36
     RCC Shed (Evaporator)                                     1452               900            13.07
     RCC Shed (Spray Dryer)                                    2421              2000            48.42
     FG Stores & Butter Cold Store                            19368               400            77.47
     Utilities Section Building                                1500               350             5.25
     Foundation/Internal Roads/ETP-Civil /Loghting                                               25.00
     Gates
     Others (Sanitation, electrification etc)                                                    37.24
                                              Total                                             271.00

   For Chocolate Plant
     Particulars                                        Sq. Ft.        Rate per              Amount
                                                                     Sq.ft. ( Rs.)        (Rs. in lacs)
     RCC Sheds (3 floors)                                46500                600               279.00
     Other Sheds                                         85253                400               341.01
     Office Building, canteen Laboratory                  8600                850                73.10
                                           Total                                                693.11



                                                   28
Plant & Machinery

For Condensed Milk Plant

      Machinery                                                          Amount
                                                                       (Rs.in lacs)
 A)   Fresh Milk receiving Section                                           17.42
      Comprising following machineries:

      Dump Tank (1), Milk Transfer Pump(2), Duplex Filter (1),
      Milk Chiller (1), Milk Storage Tank(2)

 B)   Milk Processing Section                                               100.22
      Comprising following machineries:

      HTST Milk Pasteuizer( 1 ), Cream Seperator( 2 ), Milk Storage
      Tank (3 ), Milk Transfer Pump (1 ), SS Pipes, Valves, Fittings
      (1 Set)

 C)   Cream Handling , Butter & Ghee Manufatring Section                     69.80

      Comprising following machineries:

      Cream pasteurizer(1), Cream Balance Tank(1), Cream
      Transfer pump(2), Continuous Butter making M/c (1), Cream
      Storage Tank (2), Butter Milk Transfer Pump (1), Butter
      Trolley (1), Melting Vat (1), Prestratification Tank (2), Ghee
      Kattel (2), Ghee Settling Tank (2), Ghee Clarifier (1), Ghee
      Storage Tank (1), Ghee Filling M/c (1), S S Pipes, Valves,
      Fittings (1 Set)

 D)   Milk Evaporator with Thermal Recompression (Food &                     83.24
      Biotech-)

      Comprising following machineries:

      Feed Balance Tank (1), Feed pump with Duplex Filter (1),
      Pre-Heater (4), DSI (1), DSI/Flash Vessel pumps (2),
      Caalndria (4), Vapour Seperator (4), Intermediate Pumps
      (8), Thermo Vapour Recompressor(1), Condensate Pump(1),
      Condensor(1), Vaccum pump (1), Water Balance Tank (1), S
      S Pipes, Valves, Fittings (1 lot), Instrumentation and control
      Penal (1 lot).

 E)   Spray Drying Section (Single Stage)                                    85.00

      Comprising following machineries:

      Feed Balance Tank (2), Feed pumps with duplex Filter (1),
      Water Balance Tank (1), Feed Pipes and Fittings (1 lot),
      Tubular Heater (1), Disc Automizer Automizer Stand (1),
      Drying Chamber Air Distributer (1), Neck Cooling Fan (1),


                                             29
       Air Intake Filter (1), Delevery Fan (1), Air Heating System
       (1), Conveying System (Cooling) Fan (1), Air Intake Filter
       (1), Dehumidefier Battery (1), Bagging Cyclone (1), Cyclone
       Seperator (2), BTV/Rotary Valve (4), Exhaust Fan (1),Sifter
       (1), Instrumentation and control Penal (1).

 F)    Sweetened Condensed Milk Section (Milkraft)                              95.00

       Comprising following machineries:

       Feed Balance Tank (1), Feed pump with duplex filter (1), Pre-
       Heater (1), High Heater (1), Hot Well (1),Sugar Mixing Unit (1),
       Evaporator (1), Condensor (Shell & Tube) (1), Vapour Ducts
       Products Pump, Vacum Pump,Duplex Filter (2),Positive
       Pump (1),Coolers ( Crystalization) (2),Storage Tanks (2),
       Lactose Mill & Sterlization (1), Pulveriser, Drum Filling,
       Arrangement Instrumentation and control Penal (1 Set)
       Homozonising.

 G)    Miscellaneous Dairy Equipments                                           12.32

       Comprising following machineries:

       Steam & Water Mixure (10), Reconstitution Unit (1), CIP Unit
       (3),Forward Pump (1), Return Pump (2), PHE GES (1),
       Packaging Table (1)

 H)    CIP without pipes & fittings                                            14.00
       Grand Total                                                            477.00

For Chocolate Plant

                                                                No of            Rate      Amount
       Machinery                                                Units     (Rs.in lacs)   (Rs.in lacs)
 A)    Waffer Unit
       Plantetory Mixer                                           1.00           3.40           3.40
       Waffer Oven WA72 plate size 350 x 470 mm                   1.00         111.00         111.00
       Total                                                                                  114.40
 B)    Enrobing Unit
       Enrober 1200 mm with Cooling Conveyor with AC              1.00          46.12          46.12
       Take Off Conveyor                                          1.00           0.50           0.50
       Moulded Chocolate Holding Tank                             2.00           7.00           1400
       Feeding Conveyor for flow pack                             1.00           4.50           4.50
       Flow Pack Machines                                         8.00           4.61          36.90
       Take Off Conveyor                                          2.00           1.50           3.00
       Metal Detector                                             1.00           3.00           3.00
       Sealing Machine C.Box                                      3.00           1.20           3.60
       Total                                                                                  111.62
 C)    Moulding Line
       Chocolate Moulding Line                                    1.00          46.12          46.12
       Tempering Machine                                          1.00          12.30          12.30



                                              30
       Set of Moulds                                            5.00           2.80         14.00
       Moulded Chocolate Holding Tank                           2.00           7.00         14.00
       Vibro Sifter                                             1.00           1.50          1.50
       Magnetic Seperator                                       1.00           0.75           .75
       Chocolate handling and pumping system                    1.00           5.00          5.00
       Take off Conveyor                                        1.00           1.50          1.50
       Wrapping Machines                                        5.00           4.61         23.06
       Wad Sealing Machine                                      1.00           0.75           .75
       C.Box Sealing Machine                                    1.00           1.20          1.20
       Metal Detector                                           1.00           3.00          3.00
       Total                                                                               123.18
 D)    Nut Coating Machine
       Chocolate Holding Tank                                   1.00          1.50           1.50
       Auto Coaters                                             2.00          9.60          19.19
       FFS Machine with loader                                  1.00         20.00              2
       Backet Alibater                                          1.00          5.00           5.00
       Total                                                                                45.69
 E)    Chocolate making and processing unit
        5 Stage Chocolate Refiner                               2.00         16.00          32.00
       Chocolate Counching                                      2.00         16.00          32.00
       Z arm Mixer 500 Ltr                                      2.00         18.00          36.00
       Conveyor                                                 2.00          3.00           6.00
       Vibro Sifter                                             2.00          1.50           3.00
       Magnetic Seperator                                       2.00          0.75           1.50
       Chocolate handling and pumping system                    2.00          0.60           1.20
       Sugar Pulverizer                                         1.00          5.23          17.70
       Trolleys for collecting refined and mixed
       product                                                  2.00           0.50          1.00
       Total                                                                               130.40
 F)    Cookies Machines
       Fully computerised Cookies -                             1.00           7.50          7.50
       Machine with Roating Heat
       Gas Operated Battery Pack                                1.00         13.50          13.50
       oven with Full Automation
       Trolleys                                                12.00          0.09           1.08
       Tray                                                   600.00        Rs.175           1.05
       CEPHAS-150 Planatery Mixer                               3.00          3.40          10.20
       Extra Bowl & Trolley                                     6.00          0.35           2.10
       Total                                                                                35.43
       Grand Total                                                                         560.72

Our subsidiary SPFPL has identified and placed orders for procuring some of the above
machineries.

Utilities and Misc. Fixed Assets

The total value of the Miscellaneous Fixed Assets which includes, the cost of erection, excise duty
and other charges and other equipments to be purchased for the project.




                                             31
For Condensed Milk Plant

 Sr.    Particulars                                     Amount
 No.                                                  (Rs.in lacs)
  1.    DG Set                                             218.50
  2.    Furniture & Fixtures                                  2.50
  3.    Air Conditioner                                       1.00
  4.    Delivery Van for 5 Ton for SCM                      10.00
        Grand Total                                        232.00

For Chocolate Plant

  Sr.     Machinery                                  No of                  Rate      Amount
  No.                                                Units           (Rs.in lacs)   (Rs.in lacs)
  A)      Hot water generation unit                   1.00                   5.09           5.09
          Air Compressor                              1.00                   3.88           3.88
          Chiller for refiner                         1.00                   5.15           5.15
          Generator 500 KVA                           1.00                 22.16          22.16
          Transformer 800 KVA                         1.00                   7.86           7.86
          Electrical Power Control Panel              1.00                   5.50           5.50
          Power Cables/ Trays                                              10.00          10.00
          Plant Lighting                                                     4.00           4.00
          Electrical Earthing System                                         2.00           2.00
          Water processing unit (Softener 3 Kl/hr)    1.00                   2.50           2.50
          Water & Air Pipe Lines                                             5.00           5.00
          Gas Bullets & distribution                  1.00                 22.00          22.00
          Air Conditioner & Dehumidifier              1.00                 28.20          28.20
          False Ceiling & Al. Partitions              1.00                   7.00           7.00
          ETP                                         1.00                   3.00           3.00
          Total                                                                          133.34

  B)      Miscellaneous Items
          Weighing Scales                             10.00                  0.15          1.50
          Insectocutors                               12.00                0.075           0.90
          Exhaust Fan                                 12.00                0.075           0.90
          Air Curtains                                6.00                  0.19           1.12
          Strapping Machine                            2.00                  0.55          1.10
          Hand Pallet Trucks                           3.00                 0.25           0.75
          Pallets                                    200.00                 0.03           6.00
          Crates                                     300.00               0.0045           1.35
          Weighing Bridge                              1.00                  5.00          5.00
          Shrink Tunnel                                2.00                  1.00          2.00
          Total                                                                           20.62

  C)      Laboratory Equipments
          Viscometer                                  1.00                  0.75           0.75
          Titration Kit                               1.00                  0.10           0.10
          Analytical Kit                              1.00                  0.50           0.50
          Vacuum Oven                                 1.00                  0.13           0.13
          Laboratory Oven with Air Circulation        1.00                  0.35           0.35



                                            32
            Scientific Balance                        1.00               0.84            0.84
            Refractometer                             2.00               0.05            0.10
            Muffle Furnace                            1.00               0.23            0.23
            B.O.D Incubator                           1.00               0.68            0.68
            Incubator Bacteriological                 1.00               0.26            0.26
            Colony Counter                            1.00               0.05            0.05
            Laminar Flow                              1.00               0.60            0.60
            Auto Clave                                1.00               0.73            0.73
            Soxlet appratus                           1.00               0.03            0.03
            Water Bath (Serological)                  1.00               0.10            0.10
            Melting Point Appratus                    1.00               0.06            0.06
            Hot Plate Rectangular                     1.00               0.07            0.07
            Analytical weight Box                     1.00               0.03            0.03
            Magnetic Stirrer                          1.00               0.04            0.04
            Distillation Unit                         1.00               0.06            0.06
            Microscope                                1.00               0.12            0.12
            Total                                                                        5.80
            Grand Total                                                                159.77

Pre-Operative Expenses

Pre operative expenses for Condensed Milk plant and Chocolate plant are estimated at Rs.25.00
lacs and Rs.192.14 lacs respectively. The expenses include expenses towards Wages &
Remuneration, interest cost, fuel charges and other charges incurred for the project.

Working Capital

For Condensed Milk Plant

                Particulars                                   No of       Amount
  Sr. No.                                                     Days      (Rs.in lacs)
      1.        Raw Material & Packaging Material              2              34.00
      2.        Finished Goods                                 30            632.00
      3.        Debtors                                        30            640.00
      4.        Working Expenses
                a) People                                       30             8.00
                b) Power & Fuel                                 30            27.00
                Total                                                       1341.00

 For Chocolate Plant
                Particulars                                   No of       Amount
  Sr. No.                                                     Days      (Rs.in lacs)
      1.        Raw Material & Packaging Material              90            866.82
      2.        Goods in Process                                5             48.16
      3.        Finished Goods                                 15            311.34
      4.        Debtors                                        30            707.14
      5.        Working Expenses
                a) People                                       30            19.50
                b) Power & Fuel                                 30            12.93
                                   Total                                    1965.89



                                            33
      Contingencies & Escalation

      A contingency & escalation provision of Rs. 215.04 Lacs is provided for.

      Schedule of implementation
      The proposed schedule of implementation for the projects of SPFPL is detailed below:
       Sr.   Activity                   Commencement            Completion         Status
       No.
       1     Land                       -                       -                  Acquired
       2     Factory Building      &    December 2007           March 2008         In the process of short
             Civil Work                                                            listing contractors
       3     Plant & Machinery          February 2008           March 2008         In the process of
                                                                                   obtaining quotations.
       4     Erection of Equipment      April 2008              May 2008           Will be commenced
                                                                                   after completion of
                                                                                   completion           of
                                                                                   construction         of
                                                                                   building.
       5     Trial Run                  May 2008                -                  -
       6     Commencement        of     June 2008               -                  -
             commercial production

       We are proposing to deploy the funds within a period of 6-8 months to commence the production
       at the earliest.

Sources and Deployment of Funds

We have commenced the implementation of project for expansion of biscuit manufacturing facility at our
existing unit & invested an amount of Rs.548.37 lacs in subsidiary company. Thus we have spent an
amount of Rs.1247.69 lacs towards the implementation of project till 30/09/2007. We have received the
Sources and Deployment of Funds Certificate dated 22/10/2007, from Vinay Aggarwal & Associates,
Chartered Accountants & Statutory Auditors of the Company. Details of the sources and deployment of
the funds as per the certificate are as follows:

                                                            (Rs. in Lacs)
 Particulars                                              Amount
 Deployment of Funds
 Building                                                            649.32
 Advance for Plant & machinery                                        50.00
 Investment in Subsidiary Company i.e. Surya                         548.37
 Processed Food Pvt. Ltd.
                      Total                                         1247.69
 Sources of Funds
 Internal Accruals                                                  1247.69
                      Total                                         1247.69

Our subsidiary has spend and amount of Rs.548.71 lacs till 30/09/2007 on implementation of project for
condensed milk and Chocolate plant. Sources & Deployment of funds on project for setting up of
condensed milk plant and chocolate plant by Surya Processed Food Pvt. Ltd. as certified by M/s M.B.



                                                     34
Gupta & Co., Chartered Accountant & Statutory Auditors of Surya Processed Food Pvt. Ltd vide their
certificate dated 19/10/2007 is as follows:
                                                   (Rs. in Lacs)
 Particulars                                    Amount
 Deployment of Funds
 Land                                                    187.75
 Building                                                  35.91
 Advance for Plant & machinery                           316.56
 Pre-operative expenses                                     6.21
 Cash & Bank balance                                        2.27
                        Total                            548.71
 Sources of Funds
 Share Capital from Surya Food & Agro Ltd.               548.37
 Unsecured Loan                                             0.34
                        Total                            548.71

Interim Use of Proceeds

The management, in accordance with the policies set up by the Board, will have flexibility in deploying
the proceeds received through the Issue. Pending utilization for the purposes described above, we intend
to temporarily invest the funds in high quality interest or dividend bearing liquid instruments including
deposits with banks for the necessary duration. Such investments would be in accordance with any
investment criteria approved by our Board of Directors from time to time.

Monitoring of Utilization of Funds

Our project is appraised by our Banker State Bank of India, Overseas Branch, New Delhi, who will
oversee deployment of funds & implementation of project. We will disclose the utilization of the
proceeds of the Issue under a separate head in their financial statements clearly specifying the purposes
for which such proceeds have been utilized. We will also, in their financial statements, provide details, if
any, in relation to all such proceeds of the Issue that have not been utilized thereby also indicating
investments, if any, of such unutilized proceeds of the Issue. No part of the proceeds of this Issue will be
paid by the company as consideration to their Promoters, their Directors, key management employees or
companies promoted by their Promoters, save and except in the course of normal business.

Basic Terms of the Issue

The Equity shares being offered are subject to the provision of the Companies Act, 1956, the
Memorandum and Articles of Association of our Company, the terms of this DRHP and other terms and
conditions as may be incorporated in the Allotment advice and other documents /certificates that may be
executed in respect of the issue. The Equity shares shall also be subjected to laws as applicable,
guidelines, notifications and regulations relating to the issue of capital and listing and trading of
securities issued from time to time by SEBI, Government of India, RBI, ROC and /or other authorities as
in force on the date of issue and to the extent applicable.




                                                    35
E) BASIS OF ISSUE PRICE

The Price for the Issue Price will be decided by us in consultation with the BRLM and specified in the
Prospectus that will be filed with the Registrar of Companies. The Price will also be advertised in [•], an
English language newspaper [•] and a Hindi language (Regional Newspaper) with wide circulation. The
face value of the Equity Shares is Rs. 10 and the Issue Price is [•] times the face value.

Qualitative Factors

     Existing profit making company engaged in manufacturing of biscuits for past 15 years.
     We established brand/trademark “Priyagold” & “Hak Se Mango” commanding excellent recall
     value with various sub-brands.
     Diversified portfolio through subsidiary includes established brands for juices such as “Fresh Gold”,
     “Treat” supplemented by recently launched aerated drink “Fresh Fizzy”.
     Extensive distribution network through Consignee agents/ Super stockists and retail distributors
     through out the country.

Quantitative Factors

Information presented in this section is derived from restated financial statements of the Company,
prepared in accordance with Indian GAAP.

1.     Earnings Per Share (EPS)
        Year Ended                                   EPS        Weight
                                                     (Rs.)
        March 31,2005                                  35.87            1
        March 31, 2006                                 18.82            2
        March 31, 2007                                 16.36            3
        Weighted Average                                            20.43

       Note: EPS is calculated on the basis of weighted average number of shares in each year. Weighted
       average number of shares has been calculated on time basis.

       EPS based on audited financial results for Half Year ended 30/09/2007 is Rs. 3.27 which translate
       into an EPS of Rs.6.54 on annualized basis.

2.     Price/ Earning (P/E) R ratio in relation to the Issue Price of Rs. [•]
       a.   Based   on   half   year   ended    30/09/2007,     annualized      basic   EPS   of   Rs.9.96   [●]*
       b. Based on weighted average EPS of Rs. 20.43                                                         [●]*
       * would be calculated after discovery of the Issue Price through Book-building

3.     Return on Net Worth (RONW)
        Year Ended                          RONW                Weight
                                              %
        March 31,2005                          3.79                      1
        March 31, 2006                         1.95                      2
        March 31, 2007                         4.09                      3
        Weighted Average Return on Net Worth                          3.33




                                                       36
     Return on Net worth for half Year ended 30/09/2007 is 7.82 % which translates into annualized
     RONW of 15.64%.

4.   Minimum Return on Increased Net Worth required to maintain pre-issue EPS:

     Based on half year ended 30/09/2007, annualized basic EPS of Rs.6.54: [•] %
     Weighted average EPS of Rs.20.43 : [•] %

5.   Net Asset Value (NAV) per share

     a.   As on March 31, 2007         : Rs. 399.71
     b. Issue Price                    : Rs. [●]
     c. NAV after this Issue*          : Rs. [●]
     *would be computed after discovery of the Issue Price through Book Building
     NAV based on audited financial results for half year ended 30/09/2007 is 41.81.
     Note: NAV per share is calculated on the basis of weighted average number of shares in each year.
     Weighted average number of shares has been calculated on time basis.

6.   Industry Average P/E

                                             Name of Company                      P/E Multiple
      Highest                    Nestle India Ltd.                                       36.20
      Lowest                     GlaxoSmithkline Consumer Healthcare Ltd                 18.40
      Industry Composite                                                                 31.30

     (Source: Capital Market – Vol. Oct 08 -21, 2007, Segment - Food Processing – MNC)

7.   Comparison with Peer Group

     The comparable ratios of the companies which are to some extent similar in business are given as
     follows:

                 Name of the Company                       EPS    RONW          Book        P/E
                                                                   (%)          Value      Multiple
                                                                                 (Rs.)
      Britannia Industries Ltd.                           39.30       18.50       257.40       32.80
      GlaxoSmithkline Consumer Healthcare Ltd.            28.80       24.90       129.00       18.40
      Nestle India Ltd.                                   29.40       84.80        40.30       36.20
     (Source: Capital Market – Vol. Oct 08 -21, 2007, Segment - Food Processing – MNC)
      Surya Food and Agro Limited                         16.36        4.09       399.71           -
       Figures based on 31/03/2007 numbers.
     We are in the business of biscuit & fruit juices (through our subsidiary) manufacturing and
     proposing to enhance capacity for manufacturing of biscuits and enter into the business of
     manufacturing of Condensed milk products and chocolates through our subsidiary. The industry
     comparison shown above considers comparable companies who are focused on biscuit
     manufacturing. The business model of these companies may not be directly comparable to the
     business of Surya Food and Agro Limited.

8.   The face value of Equity Shares of Surya Food &Agro Limited is Rs.10 and the Issue Price is [*]
     time of the Face Value.
     On the basis of the above parameters the Issue Price of Rs. [•] per share is justified.



                                                      37
F) STATEMENT OF TAX BENEFITS

To
The Board of Directors
Surya Food & Agro Ltd.
D-1 Sector-2
Noida-201301, U.P.


Sub :   Statement of possible Tax Benefits available to the Company and its shareholders

Dear Sirs,

We hereby report that the enclosed statement states the possible tax benefits available to the Company
and to the shareholders, of the Company under the Income tax Act, 1961, Wealth Tax Act, 1957, presently
in force in India. Several of these benefits are dependent on the Company or its shareholders fulfilling the
conditions prescribed under the relevant provisions of the statute. Hence, the ability of the Company or
its shareholders to derive the tax benefits is dependent upon fulfilling such conditions, which based on
business imperatives the Company faces in the future, the Company may or may not choose to fulfill.

The benefits discussed in the enclosed statement are not exhaustive. This statement is only intended to
provide general information to the investors and is neither designed nor intended to be a substitute for
professional tax advice. In view of the individual nature of the tax consequences and the changing tax
laws and the fact that the Company will not distinguish between the shares offered for subscription and
the shares offered for sale by the Selling Shareholders, each investor is advised to consult his or her own
tax consultant with respect to the specific tax implications arising out of their participation in the issue.

We do not express any opinion or provide any assurance as to whether:

(i) Company or its shareholders will continue to obtain these benefits in future; or

(ii) The conditions prescribed for availing the benefits have been / would be met with.

The contents of the enclosed statement are based on information, explanations and representations
obtained from the Company and on the basis of our understanding of the business activities and
operations of the Company.

For Vinay Aggarwal & Associates
Chartered Accountants
Sd/-
Vinay Aggarwal
Partner

Dated: 22/10/2007
Place: New Delhi




                                                     38
STATEMENT OF TAX BENEFITS AVAILABLE TO SURYA FOOD & AGRO LTD. ("THE
COMPANY") AND ITS SHAREHOLDERS

1. BENEFITS TO THE COMPANY UNDER THE INCOME TAX ACT, 1961 ("THE ACT"):

The Company will be entitled to deduction under the sections mentioned hereunder from its total income
chargeable to Income Tax.

Dividends Exempt Under Section 10(34)

Under section 10(34) of the act, the Company will be eligible for exemption of income by way of dividend
from its subsidiary Company and other domestic company referred to in section 115-O of the Act.

Income from Units of Mutual Funds exempt under section 10(35)

The company will be eligible for exemption of income received from units of mutual funds specified
under section 10(23D) of the Act, income received in respect of units from the administrator of specified
undertaking and income received in respect of units from the specified company in accordance with and
subject to the provisions of section 10(35) of the Act.

Computation of Capital Gains

Capital assets may be categorized into short term capital assets and long term capital assets based on the
period of holding Shares in a company, listed securities or units of Unit Trust of India or unit of Mutual
Fund specified under section 10(23D) or a zero coupon bond will be considered as long term capital
assets if they are held for a period exceeding 12 months. Consequently, capital gains arising on sale of
these assets held for more than 12 months are considered as "Long Term Capital Gains". Capital gains
arising on sale of these assets held for 12 months or less are considered as "Short Term Capital Gains".

Section 48 of the Act, which prescribes the mode of computation of capital gains, provides for deduction
of cost of acquisition/ improvement and expenses incurred in connection with the transfer of a capital
asset, from the sale consideration to arrive at the amount of capital gains. However, in respect of long
term capital gains, it offers a benefit by permitting substitution of cost of acquisition/improvement with
the indexed cost of acquisition/improvement, which adjusts the cost of acquisition/ improvement by a
cost inflation index as prescribed from time to time.

As per the provisions of section 112 of the Act, long term gains as computed above that are not exempt
under section 10(36) or 10(38) of the Act would be subject to tax at a rate of 20 percent (plus applicable
surcharge and education cess). However, as per the proviso to section 112(1), if the tax on long term
capital gains resulting on transfer of listed securities or units (whether listed or unlisted) or zero coupon
bond, calculated at the rate of 20 percent with indexation benefit exceeds the tax on long term gains
computed at the rate of 10 percent without indexation benefit, then such gains are chargeable to tax at a
concessional rate of 10 percent (plus applicable surcharge and education cess).

As per the provisions of section 111A of the Act, short-term capital gains on sale of equity shares or units
of an equity oriented fund where the transaction of sale is chargeable to Securities Transaction Tax
("STT") shall be subject to tax at a rate of 10 percent (plus applicable surcharge and education cess).




                                                     39
Exemption of capital gain from income tax

    Under section 10(36) of the Act, long term capital gains arising on eligible equity share in a company
    (acquired on or after the 1st day of march 2003 and before the 1st day of march 2004) sold through a
    recognised stock exchange in India will be exempt from tax.

    Under section 10(38) of the Act, long term capital gains arising out of sale of equity shares or a unit of
    equity oriented fund will be exempt from tax provided that the transaction of sale of such equity
    shares or unit is chargeable to STT. However, such income shall be taken into account in computing
    the book profit tax payable under section 115JB.

    According to the provisions of section 54EC of the Act and subject to the conditions specified therein,
    long term capital gains not exempt under section 10(38) shall not be chargeable to tax to the extent
    such capital gains are invested in certain notified bonds within six months from the date of transfer. If
    only part of the capital gain is so reinvested, the exemption shall be allowed proportionately.
    However, if the said bonds are transferred or converted into money within a period of three years
    from the date of their acquisition, the amount of capital gains exempted earlier would become
    chargeable to tax as long term capital gains in the year in which the bonds are transferred or
    converted into money.

Other specified deductions

Subject to the fulfillment of conditions, besides General Deduction mentioned under section 37 of the
Income Tax Act,1961 the company will be eligible, inter-alia, for the following specified deductions in
computing its business income:-

Section 35(1)(i) and (iv) of the Act, in respect of any revenue or capital expenditure incurred, other than
expenditure on the acquisition of any land, on scientific research related to the business of the company.

Section 35(1)(ii) and (iii) of the Act, in respect of any sum paid to a scientific research association which
has as its object, the undertaking of scientific research or to any approved university, college or other
institution to be used for scientific research or for research in social sciences or statistical research to the
extent of a sum equal to one and one fourth times the sum so paid.

Subject to compliance with certain conditions laid down in section 32 of the Act, the company will be
entitled to deduction for depreciation:

Depreciation shall be allowed:

    In respect of tangible assets (being buildings, machinery, plant or furniture) and intangible assets
    (being know-how, patents, copyrights, trademarks, licenses, franchises or any other business or
    commercial rights of similar nature acquired on or after 1st day of April, 1998) at the rates prescribed
    under the Income-tax rules, 1962;

    In respect of any new machinery or plant which has been acquired and installed after 31st March
    2005 by an assessee engaged in the business of manufacture or production of any article of thing, a
    further sum of 20% of the actual cost of such machinery or plant;

Under section 36(1)(i) of the Act, A deduction is available to the Company for any premium paid in
respect of insurance against risk of damage, or destruction of stocks or stores, used for the purpose of
business.




                                                      40
Under section 36(1)(ib) of the Act, a deduction is available to the Company in respect of any premium
paid to keep in force an insurance on the health of the employees.

Under section 36(1)(ii) of the Act, Bonus or Commission paid to employees is eligible for deduction to the
Company.

Under section 36(1)(iv), 36(1)(v), 36(1)(va), a deduction is available to the Company for any sum
contributerd in Recognised Provident Fund, Approved Gratuity Fund and other staff welfare scheme.

Any Bonafide expenditure incurred by the Company for the purpose of promoting family planning
among its employees is allowable as deduction. If however , such expenditure is of a capital nature , one-
fifth of such expenditure is allowable as deduction for the previous year in which it was incurred and the
balance is deductible in equal installments in the next four years u/s 36(1)(ix) of the Act.

Under Section 80 G of the Act , deduction is available to the Company for any sum paid as Donation to
certain fund, Charitable Institution @ 50% and 100% at the case may be , subject to Net Qualifying
Amount.

Under section 80 JJAA of the Act, a deduction in respect of employment of new workmen is available to
the Company to the extent of 30% of additional wages paid to the new “regular workmen” employed by
the Company in the previous year.

Under section 115 JAA (1A) of the Act, tax credit shall be allowed of any tax paid (MAT) under section
115 JB of the Act. Credit eligible for carry forward is the difference between MAT paid and the tax
computed as per the normal provisions of the Act. Such MAT credit shall not be available for set-off
beyond 7 years succeeding the year in which the MAT becomes allowable.

As per the provisions of Section 90, for taxes on income paid in Foreign Countries from projects/activities
undertaken thereat, the company will be entitled to the deduction from the Indian Income-tax of a sum
calculated on such doubly taxed income to the extent of taxes paid in Foreign Countries.


2. BENEFITS AVAILABLE TO RESIDENT SHAREHOLDERS:

Dividends exempt under section 10(34)

Under section 10(34) of the Act, income earned by way of dividend from domestic company referred to in
section 115-O of the Act is exempt from income tax in the hands of the shareholders.

Computation of capital gains

Capital assets may be categorized into short term capital assets and long term capital assets based on the
period of holding. Shares in a company, listed securities or units of UTI or unit of Mutual Fund specified
under section 10(23D) of the Act or a zero coupon bond will be considered as long term capital assets if
they are held for a period exceeding 12 months. Consequently, capital gains arising on sale of these assets
held for more than 12 months are considered as "long term capital gains". Capital gains arising on sale of
these assets held for 12 months or less are considered as "short term capital gains".

Section 48 of the Act, which prescribes the mode of computation of capital gains, provides for deduction
of cost of acquisition/ improvement and expenses incurred in connection with the transfer of a capital
asset, from the sale consideration to arrive at the amount of capital gains. However, in respect of long
term capital gains, it offers a benefit by permitting substitution of cost of acquisition / improvement with



                                                    41
the indexed cost of acquisition / improvement, which adjusts the cost of acquisition / improvement by a
cost inflation index as prescribed from time to time.

As per the provisions of section 112 of the Act, long term gains as computed above that are not exempt
under section 10(38) of the Act would be subject to tax at a rate of 20 percent (plus applicable surcharge
and education cess). However, as per the proviso to section 112(1), if the tax on long term capital gains
resulting on transfer of listed securities or units or zero coupon bond, calculated at the rate of 20 percent
with indexation benefit exceeds the tax on long term gains computed at the rate of 10 percent without
indexation benefit, then such gains are chargeable to tax at a concessional rate of 10 percent (plus
applicable surcharge and education cess).

As per the provisions of section 111A of the Act, short-term capital gains on sale of equity shares where
the transaction of sale is chargeable to STT shall be subject to tax at a rate of 10 per cent (plus applicable
surcharge and education cess).

Exemption of capital gain from income tax

    Under section 10(38) of the Act, long term capital gains arising out of sale of equity shares or a unit of
    equity oriented fund will be exempt from tax provided that the transaction of sale of such equity
    shares or unit is chargeable to STT.

    According to the provisions of section 54EC of the Act and subject to the conditions specified therein,
    long term capital gains not exempt under section 10(38) shall not be chargeable to tax to the extent
    such capital gains are invested in certain notified bonds within six months from the date of transfer. If
    only part of the capital gain is so reinvested, the exemption shall be allowed proportionately. In such
    a case, the cost of such long term specified asset will not qualify for deduction under section 80C of
    the Act.

    However, if the said bonds are transferred or converted into money within a period of three years
    from the date of their acquisition, the amount of capital gains exempted earlier would become
    chargeable to tax as long term capital gains in the year in which the bonds are transferred or
    converted into money.

    According to the provisions of section 54F of the Act and subject to the conditions specified therein,
    in the case of an individual or a Hindu Undivided Family ('HUF'), gains arising on transfer of a long
    term capital asset (not being a residential house) are not chargeable to tax if the entire net
    consideration received on such transfer is invested within the prescribed period in a residential
    house. If only a part of such net consideration is invested within the prescribed period in a residential
    house, the exemption shall be allowed proportionately. For this purpose, net consideration means full
    value of the consideration received or accruing as a result of the transfer of the capital asset as
    reduced by any expenditure incurred wholly and exclusively in connection with such transfer.

Rebate under section 88E

Section 88E provides that where the total income of a person includes income chargeable under the head
"profits and gains of business or profession" arising from taxable securities transactions, he shall get
rebate of STT paid by him in the course of his business. Such rebate is to be allowed from the amount of
income tax in respect of such transactions calculated by applying average rate of income tax.




                                                     42
3. BENEFITS AVAILABLE TO NON-RESIDENT INDIAN SHAREHOLDERS (OTHER THAN FIIs
AND FOREIGN VENTURE CAPITAL INVESTORS):

Dividends exempt under section 10(34)

Under section 10(34) of the Act, income earned by way of dividend from domestic company referred to in
section 115-O of the Act is exempt from income tax in the hands of the shareholders.

Computation of capital gains

Capital assets may be categorized into short term capital assets and long term capital assets based on the
period of holding. Shares in a company, listed securities or units of UTI or units of mutual fund specified
under section 10(23D) of the Act or a zero coupon bond will be considered as long term capital assets if
they are held for a period exceeding 12 months. Consequently, capital gains arising on sale of these assets
held for more than 12 months are considered as "long term capital gains". Capital gains arising on sale of
these assets held for 12 months or less are considered as "short term capital gains".

Section 48 of the Act contains special provisions in relation to computation of capital gains on transfer of
shares of an Indian company by non-residents. Computation of capital gains arising on transfer of shares
in case of non-residents has to be done in the original foreign currency, which was used to acquire the
shares. The capital gain (i.e., sale proceeds less cost of acquisition/ improvement) computed in the
original foreign currency is then converted into Indian rupees at the prevailing rate of exchange.

According to the provisions of section 112 of the Act, long term gains as computed above that are not
exempt under section 10(38) of the Act would be subject to tax at a rate of 20 percent (plus applicable
surcharge and education cess).

In case investment is made in Indian rupees, the long-term capital gain is to be computed after indexing
the cost According to the provisions of section 112 of the Act, long term gains as computed above that are
not exempt under section 10(38) of the Act would be subject to tax at a rate of 20 percent (plus applicable
surcharge and education cess). However, as per the proviso to section 112(1), if the tax on long term
capital gains resulting on transfer of listed securities or units or zero coupon bond, calculated at the rate
of 20 percent with indexation benefit exceeds the tax on long-term gains computed at the rate of 10
percent without indexation benefit, then such gains are chargeable to tax at a concessional rate of 10
percent (plus applicable surcharge and education cess).

As per the provisions of section 111A of the Act, short-term capital gains on sale of equity shares where
the transaction of sale is chargeable to STT shall be subject to tax at a rate of 10 percent (plus applicable
surcharge and education cess).

Options available under the Act

Where shares have been subscribed to in convertible foreign exchange -

Option of taxation under chapter XII-A of the Act:

Non-resident Indians [as defined in section 115C(e) of the Act], being shareholders of an Indian company,
have the option of being governed by the provisions of chapter XII-A of the Act, which inter-alia entitles
them to the following benefits in respect of income from shares of an Indian company acquired,
purchased or subscribed to in convertible foreign exchange:




                                                     43
    According to the provisions of section 115D read with section 115E of the Act and subject to the
    conditions specified therein, long term capital gains arising on transfer of shares in an Indian
    company not exempt under section 10(38), will be subject to tax at the rate of 10 percent (plus
    applicable surcharge and education cess), without indexation benefit.

    According to the provisions of section 115F of the Act and subject to the conditions specified therein,
    gains arising on transfer of a long term capital asset being shares in an Indian company shall not be
    chargeable to tax if the entire net consideration received on such transfer is invested within the
    prescribed period of six months in any specified asset.

    If part of such net consideration is invested within the prescribed period of six months in any
    specified asset the exemption will be allowed on a proportionate basis. For this purpose, net
    consideration means full value of the consideration received or accruing as a result of the transfer of
    the capital asset as reduced by any expenditure incurred wholly and exclusively in connection with
    such transfer.

    Further, if the specified asset in which the investment has been made is transferred within a period of
    three years from the date of investment, the amount of capital gains tax exempted earlier would
    become chargeable to tax as long term capital gains in the year in which such specified asset or
    savings certificates are transferred.

    As per the provisions of section 115G of the Act, non-resident Indians are not obliged to file a return
    of income under section 139(1) of the Act, if their source of income is only investment income and /
    or long term capital gains defined in section 115C of the Act, provided tax has been deducted at
    source from such income as per the provisions of chapter XVII-B of the Act.

    Under section 115H of the Act, where the non-resident Indian becomes assessable as a resident in
    India, he may furnish a declaration in writing to the assessing officer, along with his return of income
    for that year under section 139 of the Act to the effect that the provisions of the chapter XII-A shall
    continue to apply to him in relation to such investment income derived from any foreign exchange
    asset being asset of the nature referred to in sub clause (ii), (iii), (iv) and (v) of section 115C(f) for that
    year and subsequent assessment years until such assets are converted into money.

    As per the provisions of section 115-I of the Act, a non-resident Indian may elect not to be governed
    by the provisions of chapter XII-A for any assessment year by furnishing his return of income for that
    assessment year under section 139 of the Act, declaring therein that the provisions of chapter XII-A
    shall not apply to him for that assessment year and accordingly his total income for that assessment
    year will be computed in accordance with the other provisions of the Act.

Exemption of capital gain from income tax

    Under section 10(38) of the Act, long term capital gains arising out of sale of equity shares or a unit of
    equity oriented fund will be exempt from tax provided that the transaction of sale of such equity
    shares or unit is chargeable to STT.

    According to the provisions of section 54EC of the Act and subject to the conditions specified therein,
    capital gains not exempt under section 10(38) and arising on transfer of a long term capital asset shall
    not be chargeable to tax to the extent such capital gains are invested in certain notified bonds within
    six months from the date of transfer. If only part of the capital gain is so reinvested, the exemption
    shall be allowed proportionately.




                                                        44
    In such a case, the cost of such long term specified asset will not qualify for deduction under section
    80C of the Act. However, if the said bonds are transferred or converted into money within a period of
    three years from the date of their acquisition, the amount of capital gains exempted earlier would
    become chargeable to tax as long term capital gains in the year in which the bonds are transferred or
    converted into money.

    According to the provisions of section 54F of the Act and subject to the conditions specified therein,
    in the case of an individual, gains arising on transfer of a long term capital asset (not being a
    residential house) are not chargeable to tax if the entire net consideration received on such transfer is
    invested within the prescribed period in a residential house. If only a part of such net consideration is
    invested within the prescribed period in a residential house, the exemption shall be allowed
    proportionately. For this purpose, net consideration means full value of the consideration received or
    accruing as a result of the transfer of the capital asset as reduced by any expenditure incurred wholly
    and exclusively in connection with such transfer.

Rebate under section 88E

Section 88E provides that where the total income of a person includes income chargeable under the head
"profits and gains of business or profession" arising from taxable securities transactions, he shall get
rebate of STT paid by him in the course of his business. Such rebate is to be allowed from the amount of
income tax in respect of such transactions calculated by applying average rate of income tax.

4. BENEFITS AVAILABLE TO OTHER NON-RESIDENT SHAREHOLDERS (OTHER THAN FIIS
AND FOREIGN VENTURE CAPITAL INVESTORS):

Dividends exempt under section 10(34)

Under section 10(34) of the Act, income earned by way of dividend from domestic company referred to in
section 115-O of the Act is exempt from income tax in the hands of the shareholders.

Computation of capital gains

Capital assets may be categorized into short term capital assets and long term capital assets based on the
period of holding. Shares in a company, listed securities or units of UTI or units of mutual fund specified
under section 10(23D) of the Act or a zero coupon bond will be considered as long term capital assets if
they are held for a period exceeding 12 months. Consequently, capital gains arising on sale of these assets
held for more than 12 months are considered as "long term capital gains". Capital gains arising on sale of
these assets held for 12 months or less are considered as "short term capital gains".

Section 48 of the Act contains special provisions in relation to computation of capital gains on transfer of
shares of an Indian company by non-residents. Computation of capital gains arising on transfer of shares
in case of non-residents has to be done in the original foreign currency, which was used to acquire the
shares. The capital gain (i.e., sale proceeds less cost of acquisition/ improvement) computed in the
original foreign currency is then converted into Indian rupees at the prevailing rate of exchange.

As per the provisions of section 112 of the Act, long term gains as computed above that are not exempt
under section 10(38) of the Act would be subject to tax at a rate of 20 percent (plus applicable surcharge
and education cess).

In case investment is made in Indian rupees, the long-term capital gain is to be computed after indexing
the cost.




                                                     45
As per the provisions of section 112 of the Act, long term gains as computed above that are not exempt
under section 10(38) of the Act would be subject to tax at a rate of 20 percent (plus applicable surcharge
and education cess). However, as per the proviso to section 112(1), if the tax on long term capital gains
resulting on transfer of listed securities or units or zero coupon bond, calculated at the rate of 20 percent
with indexation benefit exceeds the tax on long-term gains computed at the rate of 10 percent without
indexation benefit, then such gains are chargeable to tax at a concessional rate of 10 percent (plus
applicable surcharge and education cess).

As per the provisions of section 111A of the Act, short-term capital gains on sale of equity shares, where
the transaction of sale is chargeable to STT, shall be subject to tax at a rate of 10 percent (plus applicable
surcharge and education cess).

Exemption of capital gain from income tax

    Under section 10(38) of the Act, long term capital gains arising out of sale of equity shares or a unit of
    equity oriented fund will be exempt from tax provided that the transaction of sale of such equity
    shares or unit is chargeable to STT.

    According to the provisions of section 54EC of the Act and subject to the conditions specified therein,
    long term capital gains not exempt under section 10(38) shall not be chargeable to tax to the extent
    such capital gains are invested in certain notified bonds within six months from the date of transfer. If
    only part of the capital gain is so reinvested, the exemption shall be allowed proportionately.

    In such a case, the cost of such long term specified asset will not qualify for deduction under section
    80C of the Act. However, if the assessee transfers or converts the notified bonds into money within a
    period of three years from the date of their acquisition, the amount of capital gains exempted earlier
    would become chargeable to tax as long term capital gains in the year in which the bonds are
    transferred or converted into money.

    According to the provisions of section 54F of the Act and subject to the conditions specified therein,
    in the case of an individual or a HUF, gains arising on transfer of a long term capital asset (not being
    a residential house) are not chargeable to tax if the entire net consideration received on such transfer
    is invested within the prescribed period in a residential house. If only a part of such net consideration
    is invested within the prescribed period in a residential house, the exemption shall be allowed
    proportionately. For this purpose, net consideration means full value of the consideration received or
    accrued as a result of the transfer of the capital asset as reduced by any expenditure incurred wholly
    and exclusively in connection with such transfer.

Rebate under section 88E

Section 88E provides that where the total income of a person includes income chargeable under the head
"profits and gains of business or profession" arising from taxable securities transactions, he shall get
rebate of STT paid by him in the course of his business. Such rebate is to be allowed from the amount of
income tax in respect of such transactions calculated by applying average rate of income tax.

5. BENEFITS AVAILABLE TO FOREIGN INSTITUTIONAL INVESTORS ('FIIS'):

Dividends exempt under section 10(34)

Under section 10(34) of the Act, income earned by way of dividend from domestic company referred to in
section 115-O of the Act is exempt from income tax in the hands of the shareholders.




                                                     46
Taxability of capital gains

Under section 10(38) of the Act, long term capital gains arising out of sale of equity shares or a unit of
equity oriented fund will be exempt from tax provided that the transaction of sale of such equity shares
or unit is chargeable to STT.

The income by way of short term capital gains or long term capital gains [in cases not covered under
section 10(38) of the Act] realized by FIIS on sale of shares of the company would be taxed at the
following rates as per section 115 AD of the Act-

    Short term capital gains, other than those referred to under section 111A of the Act shall be taxed @
    30% (plus applicable surcharge & education cess).

    Long term capital gains @ 10% (plus applicable surcharge and education cess) (without cost
    indexation).

It may be noted here that the benefits of indexation and foreign currency fluctuation protection as
provided by section 48 of the Act are not applicable.

According to the provisions of section 54EC of the Act and subject to the conditions specified therein,
long term capital gains not exempt under section 10(38) shall not be chargeable to tax to the extent such
capital gains are invested in certain notified bonds within six months from the date of transfer. If only
part of the capital gain is so reinvested, the exemption shall be allowed proportionately.

However, if the assessee transfers or converts the notified bonds into money within a period of three
years from the date of their acquisition, the amount of capital gains exempted earlier would become
chargeable to tax as long term capital gains in the year in which the bonds are transferred or converted
into money.

Rebate under section 88E

Section 88E provides that where the total income of a person includes income chargeable under the head
"profits and gains of business or profession" arising from taxable securities transactions, he shall get
rebate of STT paid by him in the course of his business. Such rebate is to be allowed from the amount of
income tax in respect of such transactions calculated by applying average rate of income tax.

6. BENEFITS AVAILABLE TO MUTUAL FUNDS

As per the provisions of section 10(23D) of the Act, any income of mutual funds registered under the
Securities And Exchange Board of India Act, 1992 or regulations made there under, mutual funds set up
by public sector banks or public financial institutions or authorized by the reserve bank of India would be
exempt from income tax. However, the mutual funds shall be liable to pay tax on distributed income to
unit holders under section 115R of the Act.

7. VENTURE CAPITAL COMPANIES / FUNDS

In terms of section 10(23FB) of the Act, all venture capital companies/funds registered with securities and
exchange of India, subject to the conditions specified, are eligible for exemption from income tax on all
their income, including profit on sale of shares of the company.




                                                    47
8. TAX TREATY BENEFITS

An investor has an option to be governed by the provisions of the Act or the provisions of a tax treaty
that India has entered into with another country of which the investor is a tax resident, whichever is more
beneficial.

9. BENEFITS AVAILABLE UNDER THE WEALTH-TAX ACT, 1957

Shares of the company held by the shareholder will not be treated as an asset within the meaning of
section 2(ea) of Wealth Tax Act, 1957, hence no wealth tax will be payable on the market value of shares
of the company held by the shareholder of the company.

Notes:

1. All the above benefits are as per the current tax law as amended by the Finance Act, 2006.

2. The stated benefits will be available only to the sole / first named holder in case the shares are held by
joint holders

3. In view of the individual nature of tax consequences, each investor is advised to consult his/her own
tax advisor with respect to specific tax consequences of his/her participation in the Issue.




                                                     48
                               IV. ABOUT SURYA FOOD & AGRO LIMITED

A) INDUSTRY OVERVIEW

The information presented in this section has been obtained from publicly available documents from various sources,
including officially prepared materials from the industry websites/publications and company estimates. Industry
websites/publications generally state that the information contained in therein has been obtained from sources
believed to be reliable but their accuracy and completeness are not guaranteed and their reliability cannot be assured.
Although the Company believes industry, market and government data used in this DRHP is reliable, it has not
been independently verified. Similarly, internal Company estimates, while believed to be reliable, have not been
verified by any independent agencies.

Indian Food Processing Industry
Food processing involves any type of value addition to agricultural or horticultural produce and also
includes processes such as grading, sorting, packaging which enhance shelf life of food products. The
Industry provides vital linkages and synergies between industry and agriculture.

India has a strong competitive advantage in food processing being blessed with unsurpassed natural
advantages. India ranks first in the world in production of cereals. It is among the top five producers of
wheat and oilseeds. This gives it the unique advantage and tremendous potential for processing of
agriculture produce.

India with arable land of 184 million hectares, produces annually 90 million tonnes of milk (highest in the
world), 150 million tonnes of fruits & vegetables (second largest), 204 million tonnes food grain (third
largest). (Source: MOFPI annual report 2006-07)

While the industry is large in size, it is still at a nascent stage in terms of development. Of the country’s
total agriculture and food produce, only 2% is processed. The share of India’s export of processed food in
global trade is only 1.5%. (Source: MOFPI annual report 2006-07)

The Food Processing activity is poised for rapid expansion. The Ministry of Food Processing Industries,
Government of India estimates the size of the Processed Food Industry at Rs.1440 billion. The
unorganized small players process more than 75% of the industry output in volume terms and 50% in
value terms. Average Growth rate of Food Processing Industries during the last five years (upto 2003-04)
has been 7.15% (Source: MOFPI annual report 2005-06).

Major Challenges for the Indian Food Processing Industry
Food processing industry is facing constraints like non-availability of adequate critical infrastructural
facilities like cold chain, packing and grading centres, etc.lack of adequate quality control & testing
infrastructure, inefficient supply chain, lack of processable varieties of farm produce, seasonality of raw
material, high inventory carrying cost, high taxation, high packaging cost, affordability and cultural
preference of fresh food. Major Challenges for the Indian Food Processing Industry are:

        Consumer education that processed foods can be more nutritious
        Low price-elasticity for processed food products
        Need for distribution network and cold chain
        Backward-forward integration from farm to consumers
        Development of marketing channels
        Development of linkages between industry, government and institutions
        Taxation in line with other nations
        Streamlining of food laws


                                                          49
Economic Survey 2006-07 says:

The increasing trend in gross domestic savings as a proportion of GDP observed since 2001-02 has
continued with the savings ratio rising from 26.4 per cent in 2002-03 to 29.7 per cent in 2003-04, 31.1 per
cent in 2004-05 and 32.4 per cent in 2005-06.

As the savings rate has gone up, private final consumption expenditure (PFCE), at current prices as a
proportion of GDP, has shown a declining trend particularly from 2001-02. PFCE as a proportion of GDP
declined from 63.1 per cent in 2002-03 to 62.1 per cent in 2003-04, 60.0 per cent in 2004-05, and further to
58.7 per cent in 2005-06. This decline has also been accompanied by substantial changes in the
consumption basket in terms of the shares of different commodity groups. In PFCE, the share of food,
beverages and tobacco came down from 43.3 per cent in 2002-03 to 39.4 per cent in 2005-06.

The food industry is on a high as Indians continue to have a feast. Fuelled by what can be termed as a
perfect ingredient for any industry - large disposable incomes - the food sector has been witnessing a
marked change in consumption patterns, especially in terms of food.

Biscuit Manufacturing Industry

The biscuit industry is classified into core and non-core segments. While staples like Glucose, Milk, Marie
and Arrowroot Biscuits are classified as core biscuits, Cream, Wafer cream, Salt Crackers and Cookies are
non-core biscuits. Broad categorization of the biscuit segment includes Glucose (44%), Marie (13%),
Cream (10%), Crackers (13%), Milk (12%) and others (8%). The biscuit industry in India, in the organized
sector produces around 60% of the total production in India, the balance 40% being contributed by
unorganized bakeries. The ratio of the organized to unorganized sector has moved from 50:50 in 2003-04
to 60:40 currently on account of consumers migrating from unbranded to branded products. In value
terms of volume, biscuit production in 2005-06 is estimated at 1.50 million MT, a growth of around 11-13
percent over last year. The high growth attributed to differentiated products, smaller stock keeping units
(SKU) and aggressive distribution.

Parle and Britannia are the largest players in the domestic market with shares of 43% and 39%
respectively. ITC, a relatively new entrant (2003-04) in the segment has picked up well with a share of
around 8%. Priya Gold has a strong presence in the north and has a share of around 7%. The other small
players like Cremica, Dukes, Anmol, Sobisco, Horlicks, Real Elite etc have a combined share about 3%.
Competition has intensified with ITC reinventing the biscuit market by launching new flavours. This has
thus been an increasing pressure to innovate and launch new variants in quick successions.

The biscuit industry derives more than 60% sales from glucose biscuits which is highly price sensitive
segment. On the other hand the premium segment enables pricing flexibility but involves high level of
product innovation and marketing skills to gain market share. Also the domestic biscuit market has
become fiercely competitive due to fuel prices going up along with increase in prices of commodities such
as sugar, flour and vanaspati. A ability to pass on raw material price hikes to the customers will influence
its margins over the medium term.

Strong brand equity and extensive distribution network are the main competitive factors in the branded
biscuit market. The distribution network ensures the availability of the brand at points of sale and also
determines a products level of penetration. An efficient network ensures lower response times and
reduces the working capital needs of the business. Further, established channels provide opportunities
for understanding consumer profiles and changes in consumption habits. (source: Crisinface, 05-06)




                                                    50
The snapshot of Biscuit Industry is as follows:
(source: www.ibmabiscuits.in)

Exports of Biscuits are estimated to around 10% of the annual production during the year 2006-07.

Imports of biscuits into India have not shown any significant growth during the last two years and have
not affected production/sales by the Indian Biscuit industry.

Marketing: Wholesale and Retail marketing in the Biscuit industry is carried out with a network of C & F
Agencies (for States and/specific Districts) Dealers / Wholesalers and Retail shops.

Biscuit Industry, especially the Small & Medium Sector, consisting of around 150 units(besides three
Large Industries), are facing erosion in their profitability and competitive capability, due to imposition of
Value Added Tax (VAT) by the State Governments @ 12.5% on Biscuits, compared to VAT oat 4% levied
on other similar food products.

Taxation: On behalf of the industry, IBMA has been pursing the issue with the Chief Ministers/Finance
Ministers of all States and also with the Chairman of the Empowered Committee on VAT, seeking
reduction in the rate of VAT on biscuit to 4%. IBMA estimates annual growth in the range of 15% to 20%
during the next five years, in the event of reduction in the rate of VAT on Biscuits to 4%.

Per capita consumption of Biscuits in the country is only 1.8 kg, as compared to 2.5 kg to 5.5 kg in South
eastern countries and European countries & USA respectively.

Annual Production of Biscuits
                                            Annual Production

                            1.6

                            1.4

                            1.2
  In Million Metric tonns




                             1

                            0.8

                            0.6

                            0.4

                            0.2

                             0
                                  2003-04    2004-05          2005-06        2006-07
                                                       Year




(Source: Indian Manufacturers Association)

The recent exemption of excise duty on biscuits upto MRP of Rs 100 per kg is expected to support
industry growth. However, the unabated inflation in input prices, especially wheat, edible oils and dairy
products, will continue to strain profitability.




                                                                        51
Fruits & Vegetable Processing Industry

The installed capacity of fruits and vegetables processing industry has increased form 11.08 lakh tons on
01/01/1993 to 21.18 lakh tones as on 01/01/2006 and 24.74 lakh tones as on 01/01/2007. The utilization
of fruits and vegetables processing is estimated to be around 2.20% of the total production.

Over the last few years, there has been a positive growth in ready to serve beverages, fruit juices and
pulps, dehydrated and frozen fruits and vegetable products, tomato products, pickles, convenience veg-
spice pastes, processed mushrooms and curried vegetables. The domestic consumption of value added
fruits and vegetable products is also low compared to the primary processed food in general and fresh
fruits and vegetables in particular which is attributed to higher incidence of tax and duties including that
on packaging material, lower capacity utilisation, non-adoption of cost effective technology, high cost of
finance, infrastructural constraints, inadequate farmers-processors linkage leading to dependence upon
intermediaries. The smallness of units and their inability for market promotion is also other main reasons
for inadequate expansion of the domestic market. In order to give fresh impetus to processing of Fruit
and Vegetables, Government in 2004-05 has allowed under I.T. Act, 100% deduction of profit for first five
year and 25% deduction for another five years for new upcoming Fruits & Vegetables Processing units.

Dairy Processing Industry

It is a matter of pride that India is the number one milk producing country in the world, maintaining the
top position since 1988, thanks to successful implementation of the operation flood programmes. World
milk production is estimated at 613 million tones growing at a CAGR of 1.1%. India ranks first in the
world in terms of milk production. Indian production stands at 91million tones growing at a CAGR of
4%. Hence, lndia contributes 4 million tones to the world’s incremental production of 7.5 million tonnes.
Despite a higher growth rate, the per capita availability of milk in lndia (229 grams per day) is lower than
the world average (285grams per day).Buffalo milk is now estimated to account for 57% of the total milk
production in India.

India has a unique pattern of production, processing and marketing/consumption of milk, which is not
comparable with any large milk producing country. Approximately 70 million rural households
(primarily, small and marginal farmers and landless labourers ) in the country are engaged in milk
production. Over 11 million farmer are organized into about 0.1 million village Dairy Cooperative
Societies (DCS)(about 110 farmers per DCS). The cumulative milk handled by DCS across the country is
about 18 million kg of milk per day. These cooperatives form part of a national milk grid which links the
milk producers through out lndia with consumers in more than 700 towns and cities bridging the gaps on
account of seasonal and regional variations in the availability of milk.

In India current annual growth rate in Milk production is pegged between 4% to 6%. This is primarily
due to the initiatives taken by the Operation flood programmes in the organizing milk producers into
cooperatives; building infrastructure for milk procurement, processing and marketing; and providing
financial, technical and management inputs by the Ministry of Agriculture & Ministry of Food processing
Industries to turn the Dairy sector into viable self-sustaining organized sector. About 35% of milk
produced in India is processed. The organized sector (large scale dairy plants) processes about 13 million
tones annually, while the unorganized sector (halwaiis and vendors) processes about 22 million tones per
annum. In the organized sector, there are 676 dairy plants in the Cooperative, Private and Government
sectors registered with the Government of lndia and the state Governments.

The Ministry of food Processing Industries is promoting organized Dairy processing sector to accomplish
upcoming demands of processed dairy products and helping to identify various areas of research for
future product development and quality improvement to revamp the Indian dairy export by way of
providing financial assistance to the dairy processing units. 32 Units have been sanctioned financial


                                                    52
assistance (Rs.591 lakhs) under the plan scheme of the Ministry during the year 2006-07 (Upto December
2006).

Growth Drivers

Changing age profile of the Indian population
As a consequence of the high birth rates prevalent until the 1990s, a large proportion of the Indian
population is relatively young - in the age group of 20- 59 years. This group is also high in consumption
and therefore, this trend is expected to provide a further boost to the growth of consumption in India.

Changing lifestyles
Urban consumers in India have become more exposed to western lifestyles, through overseas travel and
presence of foreign media in India. Increase in the population of working women and increasing
prevalence of nuclear double income families, especially in urban areas, are other trends shaping
lifestyles. The food processing sector has been impacted by these trends as there has been an increase in
the demand for processed, ready-to-cook and ready-to-eat food.

Growth of Retail Industry
One of the segments of the food industry that has been experiencing a growing interest has been food
retailing. At present, only 1 per cent of the food items retailed in India flow through the organised retail
channel. But this situation is expected to change due to the following reasons: changing lifestyle,
increasing number of nuclear and dual income families, changing consumer tastes, increasing disposable
incomes among others.
Some of the players that have shown a keen interest in this segment are Reliance, Tatas, ITC Group,
Lohias-promoted Indo Rama, Mumbai-based RK Hospitality, Kishore Biyani with his Big Bazaar, RPG
group.


Advantage India

Due to its diverse agro-climatic conditions, it has a wide-ranging and large raw material base suitable for
food processing industries. Presently a very small percentage of these are processed into value added
products. The semi-processed and ready to eat packaged food segment is relatively new and evolving.
India has the largest irrigated land in the world.
India’s comparatively cheaper workforce can be effectively utilized to set up large low cost production
bases for domestic and export markets. Cost of production in India is lower by about 40 per cent over a
comparable location in EU and 10-15 per cent over a location in UK.
Along with these factor conditions, India has access to significant investments to facilitate food
processing industry. There have been increasing investments not only by domestic firms and Indian
government, but also foreign investors.

Industry competitiveness

The Indian food processing sector is highly competitive. There are a large number of players in the
organised as well as unorganized sector. The organized sector is small but growing. The sector offers
potential for growth and a large number of MNCs have entered into India to leverage this opportunity
such as Unilever. These players face competition from strong Indian brands. Companies have adopted
various strategies to maintain and increase their market share in India. These include competitive pricing,
aggressive advertising campaign, expansion plans etc.


                                                    53
High level of competition within the industry has lead to innovations in several areas, thereby raising the
overall capability levels in the sector. This will facilitate sustained growth in the sector and help it to
become globally competitive.

Policy Initiatives

Government is actively encouraging investment in agro processing industries to reduce wastage and
encourage value addition. A strong and dynamic food processing sector plays a significant role in
diversification of agricultural activities, improving value addition opportunities and creating surplus for
export of agro-food products.

The Government has formulated and implemented several schemes to provide financial assistance for
setting up and modernizing of food processing units, creation of infrastructure, support for research and
development and human resource development in addition to other promotional measures to encourage
the growth of the processed food sector.

•   Most of the processed food items have been exempted from the purview of licensing under the
    Industries (Development and regulation) Act, 1951, except items reserved for small-scale sector and
    alcoholic beverages.
•   Food processing industries were included in the list of priority sector for bank lending in 1999.
•   Automatic approval for foreign equity up to 100 per cent is available for most of the processed food
    items except alcohol, beer and those reserved for small-scale sector subject to certain conditions.

Future Outlook

Indian food processing industry has seen significant growth and changes over the past few years, driven
by changing trends in markets, consumer segments and regulations. These trends, such as changing
demographics, growing population and rapid urbanization are expected to continue in the future and,
therefore, will shape the demand for value added products and thus for food processing industry in
India. The Government of India’s focus towards food processing industry as a priority sector is expected
to ensure policies to support investment in this sector and attract more FDI. India, having access to vast
pool of natural resources and growing technical knowledge base, has strong comparative advantages
over other nations in this industry. The food processing sector in India is clearly an attractive sector for
investment and offers significant growth potential to investors.

The Confederation of Indian Industry (CII) has estimated that the food processing sector has the potential
of attracting US$ 33 billion of investment in 10 years and generates employment of 9 million person-days.




                                                    54
B) BUSINESS OVERVIEW

Our Business

   We are one of the leading manufacturers of Biscuits in India. We are into the business of
   manufacturing and selling of Biscuits for the past 15 years. During this period, we have established
   strong manufacturing capabilities and have invested substantially in developing consumer
   preference for our products. Our Biscuits are sold under a well known brand name “Priyagold”.
   Our trademarks/ brands “Hak Se Maango” & “Priyagold” have emerged as one of the most
   powerful brands in FMCG sector. We have continued to invest in the front end on Brands, our
   manufacturing capabilities, deliverables and distribution strength.

   Today, we have 4 plants located in Greater Noida, Lucknow (U.P) and Surat (Gujarat). We also
   outsource some of our requirements from another plant located in Hyderabad. Our capacities have
   reached 85,000 MT p.a. during this time which along with strong brand building and distribution
   capabilities have enabled us to command a sizable market share in the Biscuit market despite
   competition from well established players in the industry.

   We have developed a distribution channel through Consignee sales agents / super stockists and
   distributors throughout the country. Though our concentration is largely in the Northern & Central
   part of the country, we have penetrated into the other regions considerably. Our Brands now have
   greater availability in rural markets in Northern India and also up markets in major cities across pan
   India.

   After establishing our foothold in Biscuit industry, we have continued to adopt a strategy to identify
   and commercialize profitable growth opportunities by leveraging established brand and distribution
   network. Following this strategy, we diversified into manufacturing of fruit juices through our
   subsidiary Surya Fresh Foods Ltd. The manufacturing facility is located at Greater Noida, UP. It has
   a capacity of 130 Kilo Litres/Day and has state of art manufacturing/processing facilities which are
   ISO 9001:2000 certified.

   We have consciously invested in creating markets for fruit juices and have established brands such as
   “Fresh Gold” and “Treat”. Both the brands are also well established and have penetrated into the
   fruit juice market aggressively by commanding considerable market share. Recently, we have also
   forayed into the aerated fruit drink segment with a launch of “Fresh Fizzy” which is launched into
   two flavours, Apple and Orange.

   Our sales and marketing team has been working towards innovative and effective marketing tools to
   remain competitive in a fiercely competitive environment. Recently, we have won a tender for
   supply of Priyagold Biscuits products and “Fresh gold” & “Treat” brands of fruit juices to catering
   units on Indian Railway Stations. This tender is awarded by Indian Railway Catering and Tourism
   Corporation Ltd. (IRCTC) which allows us to set-up food Kiosk for sale of our products at 193
   Railway Stations which will translate into approximately 300 food Kiosks spread across various
   cities in India. We have commenced establishment of these Kiosks by establishing about 30 Kiosks
   on various Railway Stations and balance would also be functional soon. We will sell our products at
   Kiosks which will give us enhanced brand visibility and would contribute considerably to the
   turnover. This initiative has added new dimensions to our marketing and distribution effort recently.

   We are also aggressively marketing our products in institutional category directly. Presently our
   products viz. biscuits and juices are supplied to Air lines, Hotels, Railways and organized retail
   outlets.




                                                  55
    In fiscal 2007, we posted consolidated gross sales of Rs. 29513.02 lacs and consolidated profits after
    taxes stood at Rs. 435.92 lacs. In the half year ended 30/09/2007 we have pooled consolidated gross
    sales of Rs. 19402.66 lacs and profit after tax at Rs. 671.65 lacs.

Our Business Strategy

•   Expansion & Diversification

    There is a general optimism in the market at macro economic as well as industry specific (FMCG &
    Package Food) levels. The Government of India has recently announced exemption on excise duty on
    Biscuits up to MRP of Rs.100/- per KG. Our Company is expected to benefit tremendously as our
    products fall in this category. Though continued inflation in input prices especially wheat, edible oils
    and dairy products will have a strain on profitability; the exemption in excise duty would support the
    growth of our Company. With continued best managerial inputs, procurement and distribution
    policy, our Company is well placed to reap the benefits of duty structure and the buoyant economic
    conditions in the country as a whole.

    We continued to pursue a strategy to identify and commercialize profitable growth opportunities on
    the strength of established brands. We are proposing to increase our capacities by 64,500 MT p.a. by
    establishing new manufacturing unit for the Biscuit segment. We are also diversifying to establish a
    “chocolate plant” and “condensed milk” plant through our another 100% subsidiary Surya Fresh
    Foods Ltd. We have procured the required licenses and approvals and have also acquired the land at
    Haridwar, Uttaranchal where various fiscal benefits are available. The proposed condensed milk
    plant also has a great synergy to us as almost 50% of the condensed milk products would be utilized
    by us for biscuits manufacturing. It has twin benefits of backward integration, price & supply
    competitiveness.

•   Brand

    Our strategy of strengthening the brands especially the Umbrella brand “Priyagold” has resulted in
    creating immense brand recall value. We are continuing with our effort of strengthening the brand
    with a scientific approach which will result in growth of customer base, price premium, consumer
    loyalty which is expected to result in increased earnings and ultimately enhancing enterprise value of
    our Company.

    We have identified and established in various growth sectors for eg. Snacks & Health with launch of
    various sub brands such as “Butter Bite”, “Classic Cream”, “Kids Cream”, “Butter Lite”, “Big Boss”,
    “Marie Lite”, “Marie Gold”, “CNC”, “Cheese Cracker”, “Snacks Zigzag”, “DON”, “Coconut
    Crunch”.

    The strategy is continued in fresh juice segment where brands such as Fresh Gold, Treat have been
    supplemented with newly launched “Fresh Fizzy” which is available in 3 pack sizes of 1 litre, 500 ml.
    and 250 ml.

    We have till date invested about Rs.86 crores in the brand building exercise and will continue to
    invest in the front end of brands. We are also proposing to conduct an exercise for benchmarking the
    value of Company’s brand portfolio with market value to have greater understanding of intrinsic
    value of the enterprise. The strength of the brand will be leveraged for all the new initiatives
    proposed by the Company.




                                                    56
•    Intellectual Property Rights (IPRS)

     As the Company has developed several brands, it has also created different recipes in respect of its
     large product port folio. We are proposing to initiate process to protect and safeguard the IPR’s by
     creating a system to tackle the issue of unauthorized use of the recipes by any other market
     participants.

Thus the company’s manifesto is to build on the present strength created over the years and diversify into products
and geographic portfolio. We aim at achieving profitable growth by penetrating into the consumption market to
enhance market share by constantly innovating on product profile, investing in infrastructure thereby accelerating
the top line growth to enhance the market share.

Our Competitive Strengths

Established brand name

Our umbrella brand “Priyagold” is one of the leading brands in biscuits manufacturing across the
country which is supported by popular trade mark “Hak Se Mango”. Since inceptions we have
successfully launched several brands such as ‘Butter Bite”, “Marie Lite”, “CNC”, “Big Boss”, “DON”,
“Coconut Crunch”. Continuous investment & relentless efforts to spread the brand has resulted in
increasing the market share.

Strong marketing & distribution network

The credit for the establishment of “Priyagold” brand across the country goes to our strong marketing &
distribution network. Today we have nearly 83 Consignee Agents/Super Stockists catering to approx.
2157 distributors reaching retail outlets every part of India..

Our efforts in strengthening the marketing & distribution network are continuous campaign through
media, newspapers, promotional events, sponsorships, participation in melas etc. This has resulted in
registering robust growth in sales & market share.

Experienced Management team

We have an experienced, qualified and dedicated management team; many of them have over 10 years of
experience in their respective fields. Our experienced management and its in-depth understanding of the
market in India will enable us to continue to take advantage of both current and future market
opportunities.

DETAILS OF OUR BUSINESS

a.   Location

     Existing manufacturing facilities

     We have four biscuit manufacturing plants in India. Out of four two plants are located in NOIDA.
     The main factory of the Company is located at Udyog Vihar, Greater Noida, while other factories are
     located at Surajpur, Greater NOIDA (U.P.), Lucknow (U.P.) and Surat (Gujarat) for manufacturing of
     biscuits. Besides this , we have an outsourcing arrangement with M/s Kritika Food Products Pvt.
     Ltd.,Hyderabad for manufacturing & supply of biscuits. This outsourcing arrangement helps us to




                                                        57
   penetrate our market in southern region. All these factories are located at strategic locations so as to
   ensure a constant output & easy distribution.

   Surya Fresh Foods Ltd., one of the Subsidiary Company has a manufacturing facility at NOIDA, for
   manufacturing of fruit juices.

   Registered and Corporate Office

   Our registered office is situated at D-1, Sector-2, Noida-201301, District Gautam Budh Nagar, U.P. We
   also have a corporate office located in Mumbai.

   Proposed Project

   The proposed expansion in biscuit manufacturing is going on at the location of Plant I situated at
   Udyog Vihar, Greater Noida, Uttar Pradesh. On completion of expansion we will be one of the
   company having largest biscuit manufacturing facility at one location. The enhanced capacity will
   improve our ability to cater to the growing demand for our products throughout the country.

   We also propose to invest in subsidiary Surya Processed Food Pvt. Ltd. for setting up a Condensed
   Milk Plant and a Chocalate Plant. These plants will be set up at Haridwar, Uttaranchal.

   The Government of India, Department of Industrial Policy & Promotion has announced a new
   Industrial Policy in 2003 for the state of Uttaranchal and the state of Himachal Pradesh. Our
   subsidiary company will enjoy following benefits for setting up a plant in Uttaranchal:

       100% outright excise duty exemption for a period of 10 years from the date of commencement of
       production.
       100% income tax exemption for initial period of 5 years and thereafter 30% for companies and
       25% for other than companies for a further period of five years from the date of commencement
       of commercial production.
       Capital investment subsidy @15% of investment in plant & machinery subject to a ceiling of Rs.30
       lacs.

   The proposed condensed milk plant will have a synergy to us as 50% of the output will be utilized by
   us in our biscuit manufacturing which is being outsourced presently.

b. Plant, Machinery, Technology, Process, etc.

   Our main production facility is located at NOIDA. We also have two other production facilities
   located at Lucknow and Surat. The details of all these facilities are as follows:

     Facility                      Location             Installed Capacity        Principle Function
     Our Company
     Surajpur, NOIDA               Uttar Pradesh               26000 MT           Biscuit Manufacturing
     Greater NOIDA                 Uttar Pradesh               40700 MT           Biscuit Manufacturing
     Lucknow                       Uttar Pradesh               13000 MT           Biscuit Manufacturing
     Surat                         Gujarat                     2500 MT            Biscuit Manufacturing
     Hyderabad                     Andhra Pradesh               2800 MT           Outsourcing of Biscuit
                                                                                  manufactured        by
                                                                                  Kritika Food Products
                                                                                  Pvt. Ltd.



                                                   58
      Of     our    Subsidiary
      Company
      Surajpur, NOIDA                  Uttar Pradesh           130 Kilo Litre/Day        Fruit Juice plant

c.   Manufacturing Process

     Brief process of Biscuit manufacturing is as follows:

     1- Preparation and weighing of Raw Material as per Batch formulation, i.e. First of all crystal sugar is
        grinded to powder form & .weighed. Wheat Flour is sifted and weighed , Fat, Liquid Glucose,
        Sweetened Condensed Milk, S.M.P., Invert Syrup, G.M.S. Emulsion is weighed as per batch
        Formula.

     2- Mixing :- (a)- Creaming :- Fat, Liquid Glucose, Colour, Invert syrup, Milk (SMP) or Sweetened
        Condensed Milk is charged to mixer. Creaming is done at higher speed for 10 minutes. Then
        Chemicals ( Soda, Ammonium Bi-Carbonate & Salt) is dissolved in known quantity of water. Then
        it is charged into mixer after sieving . Mixing is done for 10 minutes at High Speed. Then flavour is
        added. Again mixing is done at slow speed for 1 minute.

         (b)- Dough Mixing (Final Mixing) :- Wheat Flour is charged in the mixer . Final mixing is done for
         5-6 minutes at slow speed. During the final mixing, SMBS (Sodium meta Bi sulphite) salt is added.
         In few varieties, MACP (Mono Acid calcium Phosphate) is dissolved in water, sieved and then
         adding during final mixing. Dough consistency is checked after final mixing.

     3- Make-Up Plant :- (a) Rotary moulder section :- Mixed Dough is feed into feeding conveyor (Dough
        Breaker). Then it is passed through Metal Detector and finally feed into Rotary Moulder Hopper.
        Depending on the variety (different moulding Die) Biscuit is formed on endless canvas, goes to
        Panner web into oven for Basking. In makeup plant, Biscuit weight, shape, size is maintained as per
        standard.

     4- Baking :- Baking is the continuous Process. Each variety is having standard heat Profile setting of
        Top/ Bottom heat, Damper setting is fixed. Baking time for each Variety is fixed*.
        *During Baking, Biscuit is first heated puffed then baked. Colour on the Biscuit is given in the last section
        of Tunnel Oven.

         (b) Rotary Cutting :- Mixed Dough is feed to Laminator hopper. Sheet is made, automatic
         lamination is done by the machine. Laminated Dough sheet is passed through 1st reduction gauge
         roller, then to 2nd reduction gauge roller, and finally to final gauge roller. The weight of Biscuit is
         controlled hereby Adjusting the Thickness of sheet. Then the final sheet is passed through rotary
         cutter and then Biscuit is formed. Milk spray is done on Biscuit before it enter to Oven. The return
         scrap is again recycled into Laminator Hopper.

         1- Cooling :- After Baking , Biscuit is transferred on a cooling conveyor. Since it is a continuous
            process, Biscuit is cooled at room temperature.
         2- Stacking :-After cooling, biscuit is stacked in Rows on packing table.
         3- Packing :- Then packing of Biscuit is done online by Automatic Packing Machines.
            Depending on market demand, different sizes of packets are packed.

         Then the Packets are stacked in Corrugated Box, and Top/ Bottom of Corrugated Box is sealed
         with the help of self adhesive BOPP Tape.




                                                        59
d. Collaborations, any performance guarantee or assistance in marketing by the collaborators

     The Company does not have any collaboration.

e.   Infrastructure facilities for raw materials and utilities like water, electricity etc.

     Raw Materials

     The major raw material required by us is wheat, sugar and Edible Refined Hydrogenated Vegetable
     Oils (Palm Oil/ Soya Bean Oil/ Cotton Seed Oil and Sesame Oil) for manufacturing of buscuits.
     Presently we are procuring these basic raw materials from local market. We are proposing to enter
     into forward contracts for supply of raw materials with different agents to ensure negate to the
     impact of price fluctuation in commodity market.

     Besides this we need, Sweetened Condensed Milk, Butter, Invert Syrup, Liquid Glucose, Iodized Salt,
     Leavening Agents (Ammonium Bi-Carbonate & Sodium Bi-Carbonate), Processed Cheese, Mono
     Acid Calcium Phosphate, Dough Conditioners, Skim Milk Powder, Permitted Emulsifiers, Soya
     Lecithin, Permitted Synthetic Food Color , Cocoa Powder, Yeast, Protease Enzymes, Dessicated
     Coconut Powder, Added Flavours etc. Some of these raw materials are imported and some are
     procured from local market.

     Utilities

         Power: All our plants are connected with sufficient power supply. The details of sanctioned load
         to all these plants are as follows:

          UNIT                                    SANCTION LOAD
          SURAJPUR                                400 K.V
          LUCKNOW                                 250 K.V
          SURAT                                   180 K.V. The plant is running on L.P.G
                                                  which is supplied by Gujarat Gas
                                                  Company Ltd.
          GREATER NOIDA                           Running by Diesel Generator Set of total
                                                  load capacity of 1.5 Megawatt.

         Water: We have installed borewell machines in all our plants for supply of water for industrial
         use. The required water is transferred to water treatment plant and then supplied directly to
         production process and cooling plant after processing.

         Effluent Treatment: We are in compliance with all existing environmental and other regulations
         applicable to our business. We have effluent treatment plants in all our manufacturing facilities
         namely; NOIDA, Lucknow and Surat.

         Manpower: The total manpower directly employed by us as on date is 1200 personnel.
         Distribution of the manpower is as follows:

              Location                Factory                Office                  Total
          Unit I & II                  1059                   29                     1088
          Lucknow                       81                    07                      88
          Surat                         17                    02                      19



                                                       60
           Hyderabad                   Nil                   03                     03
           Mumbai                      Nil                   02                     02
           Total                      1157                   43                    1200

          The total requirement of manpower for the proposed plant will be 730 persons comprising of
          skilled, semi-skilled, unskilled workers, supervisory and administrative staff. The Company will
          have a combination of permanent employees and contract workers.

f.   Products of the Company

     i.   Nature of Products

          We manufacture & sell various biscuits under our umbrella brand “Priyagold”. The products
          description characterized on its contents & taste is as follows:

                                                 Butter Bite: Priyagold’s Butter Bite is a combination of
                                                 pure butter and fresh flour. It is available in five flovours
                                                 i.e. Premium, Badam Pista, Cashew, Nice and Kesar.
                                                 These biscuits are available in 100g and 250g pack.




                                                 Classic Cream: It is classic cream pasted between fresh
                                                 flour made crispy biscuits. It is available in four flavours
                                                 i.e. Orange, Elaichi, Chocolate and Milk. These biscuits
                                                 are available in 75g, 150g and 250g pack.




                                                 Kids Cream: Kids Cream Biscuit is real creamy sensation
                                                 for the taste. It is rich in protein and calcium. These
                                                 biscuits are available in 75g and 150g pack.




                                                 Butter Lite: Butter Lite biscuit are choked with butter.
                                                 These biscuits are available in 75g and 200g pack.




                                                    61
Big Boss: Priyagold’s Big Boss with milk is enriched with
the healthy combination of Vitamins, Iron and Calcium
which are necessary for the total health which leads to a
perfect growth. These biscuits are available in 75g and
150g pack.


Marie Lite: Marie Lite is all goodness of natural fiber and
quality wheat to give nutrition with 89.9% fat free. These
biscuits are available in 20g, 100g, 200g, 250g and 400g
pack.




Magic Gold: Magic Gold is a perfect blend of milk &
butter to give the real crisp and taste. It is full of calcium
& minerals to provide good health. These biscuits are
available in 100g and 200g pack.




CNC: C N C brings the ultimate balance of sugar and salt
in the form of crispy biscuit. These biscuits are available
in 14g, 25g,75g and 150g pack.




Snacks Zig Zag: Snacks ZigZag is the ultimate topping
biscuit. The great light taste of Snacks ZigZag goes well
with just about anything, making it just the right party-
time snack. These biscuits are available in 75g and 150g
pack.



Don: The biscuit contains the real power of glucose and
milk clubbed together. These biscuits are available in 16g,
60g, 80g and 200g pack.




    62
                                        Coconut Crunch: Coconut Crunch is the combination of
                                        coconut, butter and flour which makes the biscuit real
                                        crunchy and tasty. These biscuits are available in 75g and
                                        150g pack.




                                        Cheese Cracker: Cheese Cracker is piece of mouth
                                        watering cheese, wrapped in crispy flour biscuit. These
                                        biscuits are available in 75g and 200g pack.




Other snacks

                                        Chat Patta Cashew: Crisp n fresh Chatpatta cashew with
                                        the perfect blend of sizzling and crackling spices.
                                        available in 100g, ATC, 350g jar, 500g loose, 500g jar &
                                        1.25kg jar.




Products manufactured by our Subsidiary Company

One of our subsidiary company Surya Fresh Foods Ltd. (SFFL) manufactures fruit juices. These
fruit juices are marketed in the brand name of “Fresh Gold”. SFFL is also manufactures fruit
drink in the brand name “Treat”. SFPL has also forayed into the aerated fruit drinks segment
with the launch of “Fresh Fizzy”. “Fresh Fizzy” was launched in two flavours, apple and orange.
Fresh Fizzy is available in three pack sizes — one litre, 500 ml and 250 ml. The products catalogue
is as follows:




                                            63
ii. Approach to marketing and proposed marketing set-up

    The extensive distribution network, built over the years, is a major strength of our Company.
    “Priyagold” biscuits are available to consumers across the country.

    We have developed distribution channel of nearly 83 Consignee agents/Super stockist catering to
    approx.2157 wholesalers, reaching to retail outlets every part of India.

    Our marketing philosophy emphasizes catering to the masses. We constantly endeavour at
    designing products that provide nutrition & fun to the common man at affordable price. Most of
    the Priyagold offerings are in the low & mid-range price segments. This is based on the cultivated
    understanding of the Indian consumer psyche. The value-for-money positioning helps generate
    large sales volumes for the products.

    The following table illustrates presence of Consignee Agents/Super stockists appointed by us
    across the country for marketing and distribution of our products:

     Sr. No.                      STATE                                No. Consignee Agents
        1.      Uttar Pradesh                                                   25
        2.      Maharashtra & Goa                                               10
        3.      Haryana                                                         08
        4.      Bihar & Jharkhand                                               08
        5.      Delhi                                                           06
        6.      Gujarat                                                         05
        7.      Punjab                                                          04
        8.      Chandigarh, H.P & Jammu                                         04
        9.      Madhya Pradesh                                                  03
       10.      Chattisgarh                                                     03
       11.      Rajasthan                                                       02
       12.      Uttaranchal                                                     02
       13.      Orissa & West Bengal                                            02
       14.      Tamil Nadu                                                      01
                Total                                                           83

iii. Export possibilities and export obligations

    We have certain export obligations to be fulfilled. The quantum of these obligation is as follows:
    Export obligation of Surya Food & Agro Limited:
                                                                              (Rs.in Lacs)
     S.No.     EPCG Lic. No. & Date           Period        Duty Saved      Export Obligation
                                               (yrs)        (Rs. in lacs)         (Rs. in lacs)
       1       0530136529    Dt. 08/07/04        8                 74.61                596.89
       2       0530138275    Dt. 25/06/05        8                   3.47                27.76
       3       0530140962    Dt. 28/04/06        8                102.41                819.27
       4       0530142732    Dt. 29/12/06        8                   4.96                39.25
                            Total                                 185.45               1483.17

    The quantum of our export till date to fulfill the export obligation is as follows:




                                                 64
           Year                          Amount
                                      (Rs.in Lacs)
           2004-05                           25.06
           2005-06                          355.34
           2006-07                          139.58
           Total                            519.98

        Export obligation of Surya Fresh Foods Limited:
                                                                                   (Rs.in Lacs)
                                                      Period
         S.No.       EPCG Lic. No. & Date            (yrs)      Duty Saved      Export Obligation
           1         0530137940 Dt. 28.01.05             8              11.08                88.62
           2         0530139278 Dt. 09.08.05            12               1.02                12.26
           3         0530143111 Dt. 22.02.07             8              29.29               234.36
           4         0530144257 Dt. 03.08.07             8              11.09                88.72
                               Total                                    52.48               423.96

        The quantum of export by our subsidiary till date to fulfill the export obligation is as follows:
           Year                          Amount
                                      (Rs.in Lacs)
           2005-06                            5.23
           2006-07                           56.38
           Total                             61.61

COMPETITION

The Company faces competition from various domestic as well as multi national companies. The
competitors of the Company includes multi national companies such as Parle Biscuits Ltd., Britannia
Industries Ltd. and ITC Ltd. and domestic players especially in northern region of India such as Anmol
Bakers Ltd., Super Snacks Pvt. Ltd., Bakemans Industries Ltd., Bakewell Agro Ltd., Cremica Agro Food
Ltd., Gokul Food Pvt. Ltd. etc. and other small unorganized sectors.

CAPACITY AND CAPACITY UTILISATION:

The following is the capacity utilisation, production and sales of product manufactured by us and our
subsidiary as of 31/03/2007.

 Product                 Unit           Installed              Production           Sales
                                        Capacity                Quantity    Quantity Value
                                                                                       (Rs.      in
                                                                                       Lacs)
 Biscuits              M.T.                85000 MT p.a.            67399      67692      26550.73
 Fruit Juices          Kilolitre   130 Kilo Litre per day            7565       7799        2658.52




                                                        65
INSURANCE

All our manufacturing facilities are adequately insured. We regularly renew the policies to keep the
properties adequately insured. The details of insurance covers are as follows:

Sr.no        Risk          Policy No      Sum Assured               Description of goods        Validity Upto
                                           (Rs.in Lacs)
 1      Standard fire    OG08-1302-       2525.19                 Building, P&M, D.G.Set,        31/03/2008
        &      Special   4001-00000009                            Air Cond, P&M(import),
        Perils                                                    Computer, Furniture &
                                                                  Fixture At plot no-
                                                                  14,Surajpur,        Noida.
                                                                  (Unit-I)
 2      Standard fire    OG-08—1302        1150.00                Stock of Maida, Sugar,         31/03/2008
        &      Special   4005-00000003                            Vanaspati, Flavour,
        Perils                                                    Packing           Material,
                                                                  finished goods and others
                                                                  At plot no-14, Surajpur,
                                                                  Noida.(Unit-I)
 3      Standard fire    OG-08-1302-       1100.00                Covering      Stocks    of     31/03/2008
        &      Special   4005                                     Maida, Sugar, Vanaspati,
        Perils           -00000002                                Flavour,           Packing
                                                                  Material, finished goods
                                                                  and others at A-1, Udyog
                                                                  Vihar, Greater Noida
                                                                  (Unit-II)
 4      Standard fire    OG-08—1302-       3262.45                Building,      Plant     &     31/03/2008
        &      Special   4001-00000007                            Machinery at A-1, Udyog
        Perils                                                    Vihar, Greater Noida
                                                                  (Unit-II)
 5      Standard fire    OG-08-1302-       150.00                 Covering      Stocks     at    31/03/2008
        & Special        4005-00000001                            Lucknow Unit-3
        Perils

 6      Standard fire    OG-08-1302-       425.25                 Building      &       Plant    31/03/2008
        &      Special   4001-00000010                            Mechinary
        Perils                                                    at Lucknow, Unit-3
 7      Standard fire    OG-08-1302-       140.00                 Building,      Plant     &     31/03/2008
        &      Special   4001-00000008                            Mechinary, Computers,
        Perils                                                    Furniture and Stock at
                                                                  Sachin,Surat .(unit-5)

PROPERTY

A summary of the properties of the Company is given below:

 Sr.    Address/location                 Area                  Ownership details
 no
 1.     Plot No.01, Block-92A Sector-    4026.21               Taken on 90 years lease from NOIDA on
        44, Noida-201301, U.P            Sq.Mts                22/12/2006.
 2.     Plot No-01, Block-D, Sector-     938.40     Sq.        Taken on 90 years lease from NOIDA on



                                                          66
       2,Noida .-201301 U.P.                Mts                   23/09/1982. (previously allotted to Shyam Paper
                                                                  Products which was Transferred to Priyagold
                                                                  Polymers (India) Ltd on 13/05/1996, which was
                                                                  subsequently merged with Surya Food & Agro
                                                                  Ltd in 2003)
 3     Plot No.–1A, Udyog Vihar,            19905      Sq.        Taken on 90 years lease from Greater Noida
       Greater Noida, U.P                   Mts                   Industrial  Development     Authority   on
                                                                  15/03/2004.
 4.    Plot No 1A, Udyog Vihar, Gr.         41603.16              Taken on 90 years lease from Greater Noida
       Noida, U.P.                          Sq.Mts                Industrial  Development     Authority   on
                                                                  02/11/2000.
 5.    Khasra No 420M, 421M, 422,           6075       Sq.        Taken on 90 years lease from Greater Noida
       423, 425, 426 on Surajpur,           Mts                   Industrial    Development      Authority     on
       Greater Noida, U.P.                                        26/03/2002. (Sub-leased to Surya Fresh Food Ltd
                                                                  on 01/11/2004 for 25 yrs)
 6.    SPL(B) Ind Area, Kotputli,           161677.72             Taken on 99 years (from 19/03/2002) lease from
       Rajasthan                            Sq. Mts               Rajasthan State Ind. Dev & Investment
                                                                  Corporation on 27/03/2002.
 7.    C-4,Sarojini Nagar, Ind. Area,       3783.41 Sq.           Taken on 90 years lease from U.P State Dev.
       Lucknow, U.P                         mts                   Corporation on 29/09/2001.
 8.    Surajpur,  Dadri          ,Greater   4.17 killa            Freehold Property alotted to K.B.Agro Pvt Ltd.
       Noida, U.P                                                 (later name changed to Priya Protien Pvt. Ltd.
                                                                  which was merged with Surya Food & Agro Ltd
                                                                  in 2002)
 9     Plot No 4311, GIDC, Sachin,          -                     Surya Food & Agro Ltd made a rent agreement
       Surat, Gujrat.                                             with M/s Devika Food Products Pvt. Ltd., for use
                                                                  of complete manufacturing unit including land,
                                                                  Building along with Plant & Machinery on rent
                                                                  for Rs 2 lacs per month w.e.f. 01/04/2004.


Properties of Subsidiary Companies

Surya Fresh Foods Limited


 1.    Plot No. 14 Noida Dadri              6075       Sq.        Taken on lease from Surya Food & Agro Limited
       Road,    Surajpur,   Greater         Mts                   25 years from 01/11/2004.
       Noida, Uttar Pradesh


Surya Processed Food Pvt. Ltd.


 1     Plot    No.   5,    Sector-11,       33920 sqm             Taken on 90 years (from 25/05/2007) lease from
       Integrated Industrial Estate,                              State Industrial Development Corporation of
       BHEL,      Ranipur,     Distt.                             Uttaranchal Limited (SIDCUL).
       Haridwar




                                                             67
Intellectual property

The Company has its own registered Brand/Trade Mark in the name of “Priyagold” and “Hak se
Mango” . For details of registration of other trademarks and their status as on date please refer to section
“Regulatory and Other Approvals” page no.136 of this DRHP.

PURCHASE OF PROPERTY

As stated in this DRHP and save in respect of the property purchased or acquired or to be purchased or
acquired in connection with the business or activities contemplated by the objects of the issue (if any),
there is no property which the Company has purchased or acquired or proposes to purchase or acquire
which is to be paid for wholly or partly out of the proceeds of the present issue.




                                                    68
KEY INDUSTRY REGULATION

    Some of the industry regulations applicable to us and gist of these regulations is as follows.

•   Essential Commodities Act, 1955
    The Essential Commodities Act, 1955 was enacted to ensure easy availability of essential commodities
    to the consumers and to protect them from exploitation by unscrupulous traders. The Act provides
    for regulation and control of production, distribution and pricing of commodities, which are declared
    as essential for maintaining or increasing supplies or for securing their equitable distribution and
    availability at fair prices. Most of the powers under the Act have been delegated to the State
    Governments.

    Using the powers under the Act, various Ministries/Departments of the Central Government have
    issued Control Orders for regulating production/ distribution/ quality aspects/ movement etc.
    pertaining to the commodities which are essential and administered by them.

    The Essential Commodities Act is being implemented by the State Governments/UT Administrations
    by availing of the delegated powers under the Act. The State Governments/UT Administrations have
    issued various Control Orders to regulate various aspects of trading in Essential Commodities such
    as food grains, edible oils, pulses kerosene, sugar etc. The Central Government regularly monitors the
    action taken by State Government/ UT Administrations to implement the provisions of the Essential
    Commodities Act, 1955.

    The items declared as essential commodities under the Essential Commodities Act, 1955 are reviewed
    from time to time in the light of liberalized economic policies in consultation with the
    Ministries/Departments administering the essential commodities and particularly with regard to
    their production, demand, and supply.

•   Prevention of Food Adulteration Act and Rules, 1955
    Adulteration of food and drugs can cause serious damage to human life. This antisocial menace is
    sought to be countered by making the legal provisions more stringent and deterrent even entailing
    life imprisonment for adulterations causing grievous hurt and danger to human life. This malpractice
    is also being tackled through effective health education measures.
    Food is one of the essentials for proper maintenance of human health. Access to pure, nutritious food,
    free from any type of adulteration is the right of every citizen. The Directorate of Prevention of Food
    Adulteration is responsible for checking adulteration/misbranding of food articles. Although sec.272
    & 273 of IPC were in existence the same were considered not sufficient for control of adulteration of
    food articles. The Prevention of Food Adulteration Act was enacted in 1954 to strengthen the system
    for preventing adulteration in articles of food. The Central Government framed rules known as the
    "Prevention of Food Adulteration Rules, 1955". Under sec.23 of the Act the responsibility of
    implementation of Prevention of Food Adulteration Act and Rules framed there under vests in the
    State Governments and Union Territories. Each State Government and Union Territory has created its
    own structure/organization for implementation of the Act.
    Aims and Objectives: Food Safety through Food Quality Control Programme is of paramount
    importance. It can be achieved through the combined efforts and cooperation of food industry (self
    disciplined programmes and codes of practices) and the Government Authorities (Legislative
    Measures). In all the cases, the co-operation of the Consumer Organizations/Non-Governmental
    Organizations (NGOs) is a must.




                                                     69
    The Legislative measures adopted for food safety are provided under the Prevention of Food
    Adulteration (PFA) Act - a piece of Central Legislation promulgated in 1954 which repealed all earlier
    Acts of the State Governments.
    The Act which came into effect from 1st June, 1955 has been amended thrice, in 1964, 1976 and 1986
    for plugging the loopholes and making the punishments more stringent and empowering the
    Consumers and Voluntary Organizations to play more effective role in its implementation.

•   Standards of Weights and Measures Act, 1976
    The Standards of Weights and Measures Act, 1956 was the first enactment by which the uniform
    standards of weights and measures, based on the metric system were established. The standards
    established by the 1956 act were based on the international system of units, recognized by the
    General Conference of Weights and Measures (CGPM) and the International Organization of Legal
    Metrology (OIML). Standards of weights and measures were subsequently revised by CGPM to SI
    units.

    In view of the revision by the CGPM of the standards of weights and measures and the changes in the
    law suggested by the OIML, the 1956 Act was replaced by a comprehensive legislation, The Standard
    of Weights and Measures Act, 1976.

    Salient features of the Standards of Weights and Measures Act, 1976 are as follows:
    •   Establishment of the weights and measure based on the SI units, as adopted by the CGPM and
        recognized by the OIM.
    •   Provides to prescribe specification of measuring instruments used in commercial transaction,
        industrial production a measurement involved in public Health and Human safety. The
        specifications are given in the Standard of weights and Measures (General) Rules 1987.
    •   Regulation of inter-state trade and commerce in weights and measures and commodities sold,
        distributed or supplied by weights or measures;
    •   Regulation of pre-packed commodities sold or intended to be sold in the course of inter-state and
        commerce;
    •   Control and regulation of export and import of weights and measures and commodities in
        packaged form;
    •   Inspection of weighing and measuring instruments during their use to prevent fraudulent
        practices.
    •   Powers of inspectors to search, seize and forfeiture of non-standard weight or measure
    •   Power to file case in the court for prosecution

Indian Environment Regulations:

The three major statutes in India that seek to regulate and protect the environment against pollution
related activities in India are the Water (Prevention and Control of Pollution) Act, 1974, the Air
(Prevention and Control of Pollution) Act, 1981 and the Environment Protection Act, 1986. The basic
purpose of these statutes is to control, abate and prevent pollution. In order to achieve these objectives,
Pollution Control Boards (PCBs) are vested with diverse powers to deal with Water and Air Pollution
have been set up in each state. The PCBs are responsible for setting the standards for maintenance of
clean air and water, directing the installation of pollution control devises in industries and undertaking
investigations to ensure that industries are functioning in compliance with standards prescribed. These
authorities also have the power of search, seizure and investigation if the authorities are aware of or
suspect pollution. All industries and factories are required to obtain consent orders from PCBs, which are
indicative of the fact that the factory or industry in question is functioning in compliance with the
pollution control norms laid down. These are required to be renewed annually.



                                                    70
The management, storage and disposal of hazardous waste is regulated by the Hazardous waste
Management Rules, 1989 made under the Environment Protection Act, 1986. Under these rules, the PCBs
are empowered to grant authorization for collection, treatment, storage and disposal of hazardous waste,
either to the occupier or the operator of the facility.

Others:

Apart from the above, other laws and regulations that may be applicable to the Company include the
following:

  •   Contract Labour (Regulation and Abolition) Act, 1970;
  •   Industries (Development and Regulation) Act, 1951;
  •   Factories Act, 1948;
  •   Employees’ State Insurance Act, 1948;
  •   Employees’ Provident Funds and Miscellaneous Provisions Act, 1952;
  •   Payment of Gratuity Act, 1972;
  •   Payment of Bonus Act, 1965;
  •   Payment of Wages Act, 1936;
  •   Industrial Disputes Act, 1947 and Industrial Disputes (Central) Rules, 1957;
  •   Shops and Commercial Establishments Act; and
  •   Environment (Protection) Act, 1986, and Environment (Protection) Rules, 1986.

Excise Regulations

The Central Excise Act, 1944 seeks to impose an excise duty on excisable goods which are produced or
manufactured in India. The rate at which such a duty is imposed is contained in the Central Excise Tariff
Act, 1985. However, the Indian Government has the power to exempt certain specified goods from excise
duty by notification. Steel products are classified under Chapter 72 of the Central Excise Tariff Act and
presently attract an ad-valorem excise duty at the rate of 16% and also an education cess of 2% over the
duty element. Presently Excise duty is exempted on biscuits having MRP less than Rs.100/- per Kg.

We have been complying with all the industry regulations wherever applicable.




                                                   71
C) HISTORY AND CORPORATE STRUCTURE OF THE COMPANY

a. History and Corporate Structure of the Company

   Our Company was incorporated as ‘Surya Food & Agro Private Limited” on 26/11/1992 with
   Registrar of Companies, U.P., Kanpur. The Company was converted into public limited company and
   the name of the Company was changed to “Surya Food & Agro Limited” vide certificate of
   incorporation dated 27/03/2000.

   Our Company is promoted by Shri. Ballabh Prasad Agarwala . The Corporate Structure of the
   Company is as follows:

                                           Surya Food
                                               &
                                          Agro Limited




      Surya Fresh Foods Ltd.          Devika Food Products           Surya Processed Food Pvt.
         (Wholly owned                      Pvt. Ltd.                          Ltd.
           Subsidiary)                  (Wholly owned                     (Wholly owned
                                          Subsidiary)                       Subsidiary)



   Our Company started commercial production in 1993 with a modest installed capacity of 5400 M.T.
   p.a. of biscuits at village Surajpur Dadri Road, Greater Noida, which is the main plant of the
   Company. The details of the increase in production capacity over the years and capacity utilized in
   past 5 years thereof is as follows:

         Year          Installed        Actual          Capacity
                       Capacity       production       Utilisation
                        (M.T.)          (M.T.)
    2001-02                   20000         14320             72 %
    2002-03                   33000         27327             83%
    2003-04                   45000         37736             84%
    2004-05                   72000         68763             96%
    2005-06                   85000         78127             85%
    2006-07                   85000         67399             79%

   The Company also started its manufacturing activity in Lucknow (in the year 2002) and in Surat (in
   the year 2004). In the past 15 years, the Company has established itself as leading biscuit
   manufacturer under its brand name “Priyagold”.

   In 2001-2002, Fasten Trading Ltd. having its registered office at 39 Kali Krishna, Tagore Street,
   Kolkatta-700007 and Priya Proteins Pvt. Ltd. having its registered office at E-67 (LGF) Greater
   Kailash-III (Masjid Moth), New Delhi-110048 after getting approval from Hon’ble High Courts of
   Kolkatta, Allahabad and Delhi vide their orders dated 23/07/2001, 16/01/2002 and 19/03/2002 were
   merged with our Company.



                                                 72
   In 2002- 2003, Priyagold Industries (India) Ltd. having its registered office at D-1, Sector-2, Noida-
   201301, U.P. and Kanhaiya Exports Pvt. Ltd. having its registered office at 308 Central Plaza, 2/6
   Sarat Bose Road, Kolkatta-700020 after getting approval from Hon’ble High Courts of Allahabad and
   Kolkatta vide their orders dated 12/11/2002 and 20/03/2003 were merged with our Company.

   In the past, we have received International Quality Crown Award in London in December, 2004.

b. Main Objects

        The main objects of our company as per the memorandum and articles of association of the
        company are as follows.

   1.   To carry on the business of manufacturers, processors, preservers, dealers, distributors, agents,
        stockists, vendors, contractors, concessionaires, exporters and importers, of all kinds of
        preparation made for wheat, rice, pulses, vegetable, fruits, dry fruits, including biscuits, bread,
        chocolates, sweets, baby foods, ghee, butter, cream, cheese, cheesewhey, curd, canned and or
        packaged fruits, nuts, fruit juices, fruit powders, jams, sauses pickles, ciders, paneer, vegetable
        oils, vegetable ghee, artificial ghee, aerated drinks of all kinds and their bye-products, derivatives
        and allied products of all kinds and ice cream, desserts and or novelty ice cream and all kinds of
        aerated, artificial and mineral waters, soft drinks, carbonated drinks and juices of all kind an
        descriptins, lactose, glucose and medical and pharmaceutical preparations of all kinds and
        descriptions.

   2.   To carry on the business of manufacturers, producers, processors, buyers, sellers, importers,
        exporters, vendors, contractors, concessionaires and dealers in all kinds of pharmaceutical grade
        lactose, edible casein, tea/coffee whitener, humanized milk powder, cheese and allied milk and
        weaning food products, milk products such as milk, condensed milk, skimmed milk powder,
        dairy whitener, whole milk powder, cream milk, standardized milk, skimmed milk, fresh, all
        kinds of infant foods, malted milk, soya milk and all types of such other milk preparations,
        derivatives and fast food, ready to serve food cooked, semi cooked, uncooked food and food
        products of all types vegetarian, non vegetarian, packed foods, processed foods and also to run
        fast food centres, ice cream parlours, restaurants, hotels and dinning centres.

   3.   To carry on the business of preservation, dehydration, freezing, drying, canning, tinning, bottling
        and packaging of all kinds of pharmaceutical grade lactose, edible casein, tea/coffee whitener,
        humanized milk powder, cheese and allied milk and weaning food products, milk food
        products, meat and meat products, vegetable and vegetable products and eatables of all types
        and description.

   4.   To carry on the business of manufacturers processors and to prepare, refine, extract, manipulate,
        hydrollize, spellings, crush, grind, bleach, hydrogenate and otherwise deal in all kinds of
        agricultural, horticultural, dairy and farm produce, grains, cereals, deeds, oil seeds, vegetables,
        fruits, agricultural products and other perishable items, edible oils and such other food products
        and preparations of all description and kinds.

   5.   To carry on the business as manufacturers, processors, distributors, agent and dealers in and
        purchasers and sellers of dairy farm garden, poultry, eggs, fruits, porkples, spellirgs, brawn,
        potted meat, table delicacies, loaves, bread, manures and to carry on the business as farmers,
        housekeepers millers and milk, gardeners, agriculturists, horticulturists, goat keepers and also to
        run a poultry farm and to buy, sell, import, export and deal in poultry and poultry products and
        to carry on the business of raising, packing, grading and preparing for and market eggs, farm



                                                     73
         and poultry products of all description and to buy, sell and deal in chickens, chickens food,
         incubators, ducks, turkeys, geese and guinea fowls, partridge and other birds.

   Changes in our Memorandum of Association
   Since incorporation, the following changes have been made to Memorandum of Association of the
   Company:

   Change in Registered office of the Company

   The registered office of the Company was changed from C-80 Sector-4, Noida-201301, U.P., India to
   D-1, Sector-2, Noida-201301, U.P., India w.e.f. 29/12/1995.
   Change in Authorised Share Capital

            Date        From                                   To
     23/07/1993         Rs.25 lacs comprising 2,50,000         Rs.40 lacs comprising 4,00,000 equity
                        equity shares of Rs.10/- each.         shares of Rs. 10/- each.
     05/06/2000         Rs.40 lacs comprising 4,00,000         Rs.100 lacs comprising 10,00,000
                        equity shares of Rs. 10/- each.        equity shares of Rs. 10/- each.
     30/12/2003         Rs.100 lacs comprising 10,00,000       Rs.250 lacs comprising 25,00,000
                        equity shares of Rs. 10/- each.        equity shares of Rs. 10/- each.
     08/03/2007         Rs.250 lacs comprising 25,00,000       Rs.3000 lacs comprising 3,00,00,000
                        equity shares of Rs. 10/- each.        equity shares of Rs. 10/- each.

   Change of Name

   The name of the Company was changed from “Surya Food & Agro Private Limited” to “Surya Food
   & Agro Limited” w.e.f. 27/03/2000 subsequent to conversion into Public Limited Company.

c. Subsidiaries of the our Company and their business
        We have following 100 % subsidiaries:

   1.    Surya Fresh Foods Ltd. (SFFL)

         It was incorporated on 28/09/2004 with the Registrar of Companies, NCT of Delhi & Haryana
         and obtained Certificate of Commencement of Business on 14/10/2004. It became our subsidiary
         on 02/03/2005 and wholly-owned subsidiary on 10/08/2007 by transfer of beneficial interest of
         individual members to the Company. The registration No. is U15134DL2004PLC129491. The
         authorized share capital is Rs.11,00,00,000/- comprising of 1,10,00,000 equity shares of Rs.10/-
         each and paid-up share capital is Rs.6,98,88,000/- comprising of 69,88,800 equity shares of Rs.
         10/- each . Equity Shares of SFFL are not listed on any stock exchanges. Its registered office is
         situated at E-67 (LGF), Greater Kailash-III (Masjid Moth), New Delhi-110048.
         SFFL is engaged in the business of manufacturing fruit juices and aerated fruit drinks. These fruit
         juices are marketed under the brand “Fresh Gold” and “Treat”. “Fresh Gold” is available in
         different flavours such as Apple, Mango, Pineapple, litchi, mixed fruit etc. and “Treat” is a mango
         flavour drink.

         SFFL has recently forayed into the aerated fruit drinks segment with the launch of “Fresh Fizzy”.
         “Fresh Fizzy” was launched in two flavours, apple and orange. “Fresh Fizzy” is available in three
         pack sizes — one litre, 500 ml and 250 ml.




                                                     74
     Its Board of Directors comprises of below mentioned Directors:
      Mr.Manoj Kumar Agarwal                     Mrs.Usha Devi Agarwala
      Mrs.Chhavi Agarwal

     Shareholding pattern of SFFL is given below:
     Sr. No.   Name                                                       No. of Equity Shares of
                                                                                     Rs.10/- each
        1      Surya Food & Agro Ltd.                                                   69,88,794
        2      Mr.Ballabh Prasad Agarwala *                                                     1
        3      Mr.Manoj Kumar Agarwal *                                                         1
        4      Mr.Navin Kumar Agarwal *                                                         1
        5      Mr.Shekhar Agarwal *                                                             1
        6      Mrs.Bina Agarwal *                                                               1
        7      Mrs.Chhavi Agarwa *l                                                             1
                                 Total                                                  69,88,800
      (* Beneficial interest with Surya Food & Agro Ltd.)

     Its financial performance based on audited accounts is given below:
                                                                                        (Rs. in lacs)
      Particulars                                              For the year ended/as at
                                                        31/03/2007      31/03/2006      31/03/2005
      Total Income                                         2554.86           623.32                0
      Profit after Tax                                      115.53             9.79                0
      Equity Share Capital                                  698.88           698.88          698.88
      Share Application Money                                    -           238.99            2.92
      Reserves                                              125.32             9.79                0
      Book Value (Rs.)                                       11.79            10.10            9.68
      EPS (Rs.)                                               1.65             0.10                0

     It has not become a sick company under the meaning of SICA and it is not under winding up.

2.   Devika Food Products Pvt. Ltd. (DFPPL)

     It was incorporated on 06/07/2000 with the Registrar of Companies, Gujarat, Dadar & Nagar
     Haveli. It became our subsidiary on 17/06/2003 and wholly-owned subsidiary on 10/08/2007 by
     transfer of beneficial interest of individual members to the Company. Its registration No. is
     U15400GJ2000PTC038312. Its authorized and paid up share capital is Rs.30,00,000/- comprising
     of 3,00,000 equity shares of Rs. 10/- each Equity shares of DFPPL are not listed on any of the
     stock exchanges. Its registered office is situated at Plot No.4311, GIDC, Sachin, Surat, Gujarat-
     395012.

     DFPPL is engaged in the business of consumer food items. DFPPL presently not doing any
     business; however it has a biscuit manufacturing facility at Surat, Gujarat. Presently this facility
     has been let out on rental basis to Surya Food & Agro Ltd w.e.f. 01/04/2004.

     Its Board of Directors comprises of below mentioned Directors:

      Mr.Ballabh Prasad Agarwala                        Mr.Navin Kumar Agarwal
      Mr.Manoj Kumar Agarwal                            Mr.Shekhar Agarwal




                                                 75
     Shareholding pattern of DFPPL is given below:

     Sr. No.   Name                                                       No. of Equity Shares of
                                                                                     Rs.10/- each
        1       Surya Food & Agro Ltd.                                                   2,99,994
        2       Mr.Ballabh Prasad Agarwala *                                                    1
        3       Mr.Manoj Kumar Agarwal *                                                        1
        4       Mr.Navin Kumar Agarwal *                                                        1
        5       Mr.Shekhar Agarwal *                                                            1
        6       Mrs.Bina Agarwal *                                                              1
        7       Mrs.Chhavi Agarwal *                                                            1
                                  Total                                                  3,00,000
     (* Beneficial interest with Surya Food & Agro Ltd.)

     Its financial performance based on audited accounts is given below:
                                                                                        (Rs. in lacs)
      Particulars                                              For the year ended/as at
                                                      31.03.2007        31.03.2006       31.03.2005
      Total Income                                         24.26             24.18            24.00
      Profit after Tax                                     15.10             14.85            10.15
      Equity Share Capital                                 30.00             30.00            30.00
      Reserves                                             32.69             16.38              1.53
      Book Value (Rs.)                                     20.90             15.46            10.43
      EPS (Rs.)                                              5.03              4.95             3.38

     It has not become a sick company under the meaning of SICA and it is not under winding up.

3.   Surya Processed Food Pvt. Ltd. (SPFPL)

     SFPPL was incorporated on 25/07/2006 with the Registrar of Companies, NCT of Delhi &
     Haryana. It became our subsidiary on 26/08/2006 and wholly-owned subsidiary on 10/08/2007
     by transfer of beneficial interest of individual members to the Company. Its registration No. is
     L15139DL2006PTC151222. Its authorized share capital is Rs.6,00,00,000/- comprising of 60,00,000
     equity shares of Rs. 10/- each and paid-up share capital is Rs.5,48,37,000/-.comprising of
     54,83,700 equity shares of Rs. 10/- each. The equity shares of SFPPL are not listed on any of the
     stock exchanges. Its registered office is situated at R-52, 3rd Floor, Vikas Marg, Shakarpur, Delhi-
     110092.
     SPFPL is proposing to enter into business of manufacturing Diary products and Chocolates.
     SPFPL has acquired 33920 sq.mtr. land situated at Integrated Industrial Estate, BHEL, Ranipur,
     Dist. Haridwar, Uttaranchal from State Infrastructure & Industrial Development Corporation of
     Uttaranchal Ltd. (SIDCUL) for 90 years lease. The Government of India, Department of Industrial
     Policy & Promotion has announced a new Industrial Policy in 2003 for the state of Uttaranchal
     and the state of Himachal Pradesh. Our subsidiary company will enjoy following benefits for
     setting up a plant in Uttaranchal:

         100% outright excise duty exemption for a period of 10 years from the date of
         commencement of production.
         100% income tax exemption for initial period of 5 years and thereafter 30% for companies
         and 25% for other than companies for a further period of five years from the date of
         commencement of commercial production.



                                                 76
    Capital investment subsidy @15% of investment in plant & machinery subject to a ceiling of
    Rs.30 lacs.
We are proposing to install “chocolate” and “condensed milk plant” in SFPPL and will infuse
capital into the company as appraised by our bankers for the said purpose.

Its Board of Directors comprises of below mentioned Directors:
 Mr.Manoj Kumar Agarwal                           Mr.Navin Kumar Agarwal
 Mrs.Bina Agarwal

Its shareholding pattern is given below:
Sr. No. Name                                                           No. of Equity Shares of
                                                                                  Rs.10/- each
   1       Surya Food & Agro Ltd.                                                    54,83,693
   2       Mr.Ballabh Prasad Agarwala *                                                      1
   3       Mr.Manoj Kumar Agarwal *                                                          1
   4       Mr.Navin Kumar Agarwal *                                                          1
   5       Mr.Shekhar Agarwal *                                                              1
   6       Mrs.Bina Agarwal *                                                                1
   7       Mrs.Chhavi Agarwal *                                                              1
   8       Mrs.Nidhi Agarwal *                                                               1
                             Total                                                   54,83,700
(* Beneficial interest with Surya Food & Agro Ltd.)

Its financial performance based on audited accounts is given below:

 Particulars                                          For the year
                                                      ended/as at
                                                       31.03.2007
 Total Income                                               -
 Profit after Tax                                           -
 Equity Share Capital                                         150.00
 Reserves                                                   -
 Book Value (Rs.)                                                10
 EPS (Rs.)                                                  -

It has not become a sick company under the meaning of SICA and it is not under winding up.




                                            77
D) SHAREHOLDERS’ AGREEMENT
  There are no Shareholders’ Agreements existing as on date.
  Other Agreements
  Except the Contracts / Agreements entered into in the ordinary course of the business carried on or
  intended to be carried on by the Company, the Company has entered into following Agreement /
  Contract.

            Name of the Party                 Date of Agreement                   Purpose
   M/s Kritika Food Products Pvt. Ltd.            14/11/2005        The Agreement is for manufacture
   (a Company incorporated in India             For a period of 3   of biscuits by the Kritika Food
   having its registered office at 4-4-        years, renewable     Products Private Limited on behalf
   884/2, K.S.Lane, Sultan Bazar,              for a further term   of Company for a processing
   Hyedrabad- 500095,Andhra Pradesh )            of three years     charge. The manufactured goods
                                                                    are the property of the Company.

  Financial / Strategic Partners
  There are no financial or strategic partners.




                                                   78
E) MANAGEMENT

a.   Board of Directors
     The Board of Directors conducts the day to day operations of the company. As per the Articles of
     Association, Company can not have less than three or more than twelve directors. The following table
     sets forth details regarding the members of Board as of date of filing this DRHP with SEBI:

      Sr.     Name, (Age), Father’s name,     Residential           Other Directorships
      No.     Qualification, Designation &    Address
              Occupation
      1       Shri       Ballabh    Prasad    B-14     Sector-14,   1. Surya Fresh Foods Ltd.
              Agarwala (59yrs),               Noida-201301, U.P.    2. Devika Food Products Pvt. Ltd.
              S/o Late Shri Kali Charan                             3. Surya Shopping Arcade Pvt. Ltd.
              Agarwala,
              Qualification:B.Com
              Chairman       &    Managing
              Director
              Business

      2       Shri Manoj Kumar Agarwal        B-14     Sector-14,   1. Surya Processed Food Pvt. Ltd.
              (38 yrs)                        Noida-201301, U.P.    2. Devika Food Products Pvt. Ltd.
              S/o Shri Ballabh Prasad                               3. Surya Agrotech Infrastructure
              Agarwala                                              Ltd.
              Qualification:B.Com
              Whole-time Director
              Business

      3       Shri Navin Kumar Agarwal        B-14     Sector-14,   1. Surya Processed Food Pvt. Ltd.
              (35 yrs)                        Noida-201301, U.P.    2. Devika Food Products Pvt. Ltd.
              S/o Shri Ballabh Prasad                               3. Surya Agrotech Infrastructure
              Agarwala                                              Ltd
              Qualification:B.Com
              Whole-time Director
              Business

      4       Shri Shekhar Agarwal (31        B-14     Sector-14,   1. Devika Food Products Pvt. Ltd.
              yrs)                            Noida-201301, U.P.    2. Surya Agrotech Infrastructure
              S/o Shri Ballabh Prasad                               Ltd
              Agarwala
              Qualification:B.Com
              Whole-time Director
              Business




                                                   79
     Sr.     Name, (Age), Father’s name,       Residential           Other Directorships
     No.     Qualification, Designation &      Address
             Occupation

     5       Shri Pradeep Kumar Jain           10 Babar Lane, 1st    1.  Parsvnath Developers Ltd.
             (42 yrs)                          Floor,      Bengali   2.  Amazon India Ltd.
             S/o Shri Sheetal Prasad Jain      Market,       New     3.  Parasnath & Associates Pvt.
             Qualification::B.A.               Delhi-110001              Ltd.
             Director (Independent)                                  4. Parsvnath             Landmark
             Industrialist                                               Developers Pvt. Ltd.
                                                                     5. Parsvnath Telecom Pvt. Ltd.
                                                                     6. Honey Builders Pvt. Ltd.
                                                                     7. New Hind Enterprises Pvt. Ltd.
                                                                     8. Parasnath Travels and Tours
                                                                         Pvt. Ltd.
                                                                     9. Indo Continental Hotels and
                                                                         Resorts Ltd.
                                                                     10. PHD Chamber of Commerce
                                                                         and Industry
     6       Shri Ram Lakhan Prasad            141/1C       Lenin    Nil
             Sinha (68 yrs)                    Sarani,    Kolkata,
             S/o Late Shri Rohan Prasad        West       Bengal-
             Sinha                             700013
             Qualification: C.A
             Director (Independent)
             Chartered Accountant

     7       Shri Ajay Kumar Ghosh (66         89D, D D Mondal       Sona Biscuits Limited
             yrs)                              Ghat          Road,
             S/o Late Shri Dharani Kanta       Dakshineswar,
             Ghosh                             Kolkata, 700076
             Qualification: B.Sc. (Hons), B.
             Tech, M. Tech
             Director (Independent)
             Consultant

     8.      Shri Ajay Kumar Raman             11 Jain Mandir        Qualitech India Consultants Private
             (70 yrs)                          Road,                 Limited
             S/o. Shri Radha Raman             New Delhi - 110001
             Qualification: B.E. Mechanical
             Director (Independent)
             Business

Brief Profile of the executive and non-executive directors of the company is given below:

Shri Ballabh Prasad Agarwala, 59 years, Chairman & Managing Director is the founder Director and
Promoter of the Company. He is having about 35 years of experience in the business and industry. He is a
well known personality in the biscuit manufacturing industry and has received “U.P.Ratan” award for
his entrepreneurship. He is responsible for overall working of the Company and is instrumental in
making strategic decisions of the Company. Under his leadership, the Company has grown manifold and
achieved a “International Quality Crown Award, London 2004” for best quality biscuit manufacturer


                                                    80
Shri Manoj Kumar Agarwal, , 38 years, Whole-time Director has about 18 years of experience in the
business and industry. He is a commerce graduate looking after the manufacturing operations and
Quality Control and is instrumental in increasing the overall biscuit manufacturing capacity of the
Company.

Shri Navin Kumar Agarwal, 35 years, Whole-time Director has about 15 years of experience in the
business and industry. He is a commerce graduate looking after the manufacturing operations and
Quality Control of products of the Company

Shri Shekhar Agarwal, , 31 years, Whole-time Director has about 10 years of experience in the business
and industry. He is a commerce graduate responsible for marketing of products as well as financial
matters of the Company. He is instrumental in increasing the overall turnover & profitability of the
Company.

Shri Pradeep Kumar Jain, 42 years, is a leading industrialist with two decades of experience having
interest in the real estate sector. He has received various awards including ‘Jawaharlal Nehru Award for
Excellence’, ‘Vijay Ratna Award’, ‘Udyog Ratna Award’ and the ‘World Economic Progress Award’ for
his entrepreneurship. He is also a member of the Board of Trustees of the Moradabad Institute of
Technology. He joined Company’s Board of Directors on 1st September, 2007 as Independent Director.

Shri Ajay Kumar Ghosh, 66 years, , is an Independent Director of the Company. He has done B.Sc.
(Hons), B. Tech, M. Tech and has over 27 years of technical expertise in biscuit manufacturing industry.

Shri Ram Lakhan Prasad Sinha, 68 years is an Independent Director of the Company. By profession he is
a Chartered Accountant in practice.

Shri Ajay Kumar Raman, 70 years is B.E. Mechanical, has over 46 years of experience in organizing and
managing international projects. He was recognized by WHO in 2001 for outstanding consultancy
services provided to enterprises. He handled assignments with United Nations Industrial Development
Organisation (UNIDO) and World Bank projects. He joined Company’s Board as Independent Director.

Details of Borrowing Powers of the Directors

The Company has passed an ordinary resolution at its AGM held on September 18, 2007 in terms of the
provisions of section 293(1)(d) of the Act, whereby it has authorized the Board of Directors to borrow
money up to Rs.2,00,00,00,000 (Rupees Two Hundred crores) from time to time (apart from temporary
loans obtained by the Company from its bankers in the ordinary course of business).

b. Compensation of Directors

   Compensation to Executive Directors

   Shri Ballabh Prasad Agarwala is appointed as Chairman and Managing Director of the Company
   for the period of three years w.e.f. 01/09/2007. The brief terms of the appointment are as follows:

     Salary, perquisites     :   Rs. 3,50,000/- per month
     and allowance
     Other terms             :   The below mentioned privileges shall not be included in the
                                 computation of ceiling on remuneration specified above:

                                 (i) Contribution to Provident Fund, Superannuation Fund or Annuity



                                                  81
                                 Fund to the extent these, either singly or put together, are not
                                 taxable under the Income Tax Act, 1961
                           (ii) Gratuity payable at a rate not exceeding half month’s salary for
                                 each completed year of service.
                           (iii) Encashment of un-availed leave at the end of the tenure.
                           (iv) Free use of Company’s car for official purposes and telephone at
                                 the residence shall not be considered as perquisites.
                           (v) Re-imbursement of entertainment expenses, traveling and all
                                 other expenses actually & properly incurred for the purpose of the
                                 Company shall not be considered as perquisites.

Shri Manoj Kumar Agarwal was appointed as Whole-time Director of the Company for the period
of three years w.e.f. 01/09/2007. The brief terms of the appointment are as follows:

 Salary, perquisites   :   Rs. 3,50,000/- per month
 and allowance
 Other terms           :   The below mentioned privileges shall not be included in the
                           computation of ceiling on remuneration specified above:

                           (i) Contribution to Provident Fund, Superannuation Fund or Annuity
                                 Fund to the extent these, either singly or put together, are not
                                 taxable under the Income Tax Act, 1961
                           (ii) Gratuity payable at a rate not exceeding half month’s salary for
                                 each completed year of service.
                           (iii) Encashment of un-availed leave at the end of the tenure.
                           (iv) Free use of Company’s car for official purposes and telephone at
                                 the residence shall not be considered as perquisites.
                           (v) Re-imbursement of entertainment expenses, traveling and all
                                 other expenses actually & properly incurred for the purpose of the
                                 Company shall not be considered as perquisites.

Shri Navin Kumar Agarwal was appointed as Whole-time Director of the Company for the period
of three years w.e.f. 01/09/2007. The brief terms of the appointment are as follows:

 Salary, perquisites   :   Rs. 3,50,000/- per month
 and allowance
 Other terms           :   The below mentioned privileges shall not be included in the
                           computation of ceiling on remuneration specified above:

                           (i) Contribution to Provident Fund, Superannuation Fund or Annuity
                                 Fund to the extent these, either singly or put together, are not
                                 taxable under the Income Tax Act, 1961
                           (ii) Gratuity payable at a rate not exceeding half month’s salary for
                                 each completed year of service.
                           (iii) Encashment of un-availed leave at the end of the tenure.
                           (iv) Free use of Company’s car for official purposes and telephone at
                                 the residence shall not be considered as perquisites.
                           (v) Re-imbursement of entertainment expenses, traveling and all
                                 other expenses actually & properly incurred for the purpose of the
                                 Company shall not be considered as perquisites.




                                             82
     Shri Shekhar Agarwal was appointed as Whole-time Director of the Company for the period of
     three years w.e.f. 01/09/2007. The brief terms of the appointment are as follows:

      Salary, perquisites     :   Rs. 3,50,000/- per month
      and allowance
      Other terms             :   The below mentioned privileges shall not be included in the
                                  computation of ceiling on remuneration specified above:

                                  (i) Contribution to Provident Fund, Superannuation Fund or Annuity
                                        Fund to the extent these, either singly or put together, are not
                                        taxable under the Income Tax Act, 1961
                                  (ii) Gratuity payable at a rate not exceeding half month’s salary for
                                        each completed year of service.
                                  (iii) Encashment of un-availed leave at the end of the tenure.
                                  (iv) Free use of Company’s car for official purposes and telephone at
                                        the residence shall not be considered as perquisites.
                                  (v) Re-imbursement of entertainment expenses, traveling and all
                                        other expenses actually & properly incurred for the purpose of the
                                        Company shall not be considered as perquisites.

     Compensation to Non-Executive Director

     All the Non-Executive Directors are entitled for sitting fee of Rs. 5000/- for attending each Board
     Meeting. No sitting fees is payable to the Executive Director.

c. Compliance with Corporate Governance Requirements:

     Our Company stand committed to good Corporate Governance practices. The Guidelines issued by
     SEBI in respect of Corporate Governance will be applicable to our Company immediately upon
     applying for in-principle approval for listing of our Equity Shares on the Stock Exchanges.
     Accordingly, the Company has undertaken steps to comply with the SEBI Guidelines on Corporate
     Governance.

I.   Composition of the Board of Directors
     The Board has Eight Directors, out of which four are independent directors in accordance with the
     requirements of Clause 49 of the listing agreement of the Stock Exchanges. The Chairman of the
     Board is an executive Director.

      Sr. No.    Name of the Director           Status

      1.         Shri Ballabh Prasad            Chairman & Managing Director
                 Agarwala
      2.         Shri Manoj Kumar Agarwal       Whole-time Director
      3.         Shri Navin Kumar Agarwal       Whole-time Director
      4.         Shri Shekhar Agarwal           Whole-time Director
      5.         Shri Pradeep Kumar Jain        Independent Director
      6.         Shri Ajay Kumar Ghosh          Independent Director
      7.         Shri Ram Lakhan Prasad Sinha   Independent Director
      8.         Shri Ajay Kumar Raman          Independent Director




                                                    83
II. Corporate Governance Committees

   Committees of the Board have been constituted by us in order to look into the matters in respect of
   audit, compensation of executive directors and key managerial personnel , shareholding/Investors
   Grievance Redressal, details of which are as follows:

   1.   Audit Committee
        The Audit Committee was constituted on 12/02/2007. The Audit Committee was re-constituted
        on 01/09/2007 and on 19/09/2007 in terms of requirement of clause 49 of the listing agreement.
        The Committee currently consists of three directors Shri Ram Lakhan Prasad Sinha, Shri Ajay
        Kumar Ghosh and Shri Ajay Kumar Raman. All these directors are independent directors and
        majority having finance and accounting background. Shri Ram Lakhan Prasad Sinha shall be the
        Chairman of the Committee. The terms of the Audit Committee as per the terms of its
        constitution, comply with the requirements of section 292 A of the Companies Act and Clause 49
        of the listing agreement to be entered into with the Stock Exchange (S).

        Composition of Audit Committee is as follows:

         Sr.        Name of the Director            Designation in         Nature of Directorship
         No                                           committee
         1.    Shri Ram Lakhan Prasad Sinha      Chairman                  Director (Independent)
         2.    Shri Ajay Kumar Ghosh             Member                    Director (Independent)
         3.    Shri Ajay Kumar Raman             Member                    Director (Independent)

        The essential functions of the Audit Committee are as illustrated in the clause 49 of the listing
        agreement to be entered by the Company with the Stock Exchanges.

   2.   Remuneration Committee

        The Remuneration Committee was constituted by the Company on 12/02/2007 and was re-
        constituted on 01/09/2007 and on 19/09/2007. The present members of the Committee are Shri
        Ram Lakhan Prasad Sinha, Shri Ajay Kumar Ghosh and Sh Ajay Kumar Raman. The Chairman
        of the Remuneration Committee is Shri Ajay Kumar Ghosh. The Company Secretary of the
        Company shall be the secretary of this Committee.

        The role of the Remuneration Committee is to review and determine the remuneration
        packages for Managing Director as well as Whole-time Director(s) and key managerial
        personnel including pension rights and any compensation payment.

   3.   Share Transfer & Investor Grievance Committee

        The Share Transfer & Investor Grievance Committee was constituted at the Board Meeting of the
        Company held on 01/09/2007 consisting of Shri Ram Lakhan Prasad Sinha, Shri Ballabh Prasad
        Agarwala and Shri Shekhar Agarwal. The Chairman of the Share Transfer & Investor Grievances
        Committee is Shri Ram Lakhan Prasad Sinha. The Company Secretary of the Company shall be
        the secretary of this Committee.

        The terms of reference of the Share Transfer & Investor Grievances Committee are to look into
        the redressal of shareholder and investors complaints like transfer of shares, non-receipt of
        balance sheet, non-receipt of declared dividend etc.



                                                   84
     4.    Finance & Operating Committee

           The Finance & Operating Committee was constituted at the Board Meeting of the Company held
           on 01/09/2007 consisting of Shri Ballabh Prasad Agarwala, Shri Manoj Kumar Agarwal, Shri
           Navin Kumar Agarwal and Shri Shekhar Agarwal. The Chairman of the Finance & Operating
           Committee is Shri Ballabh Prasad Agarwala. The Company Secretary of the Company shall be
           the secretary of this Committee.

           The role of the Finance & Operating Committee shall be to authorize opening of bank accounts,
           change in operating instructions of bank accounts, borrowings from time to time from banks,
           financial institutions etc. and creating charges for securing the aforesaid borrowings within the
           limits set by the Board of Directors and any other matter relating to financial matters of the
           Company.

     5.    IPO Committee

           The IPO Committee was constituted at the Board Meeting of the Company held on 01/09/2007
           consisting of Shri Ballabh Prasad Agarwala, Shri Manoj Kumar Agarwal, Shri Navin Kumar
           Agarwal and Shri Shekhar Agarwal. The Chairman of the IPO Committee is Shri Ballabh Prasad
           Agarwala. The Company Secretary of the Company shall be the secretary of this Committee.

           The role of the IPO Committee shall be to appoint issue intermediaries, authorise issue of shares,
           authorise demat of shares, allotment of shares, listing of shares on stock exchanges and any other
           matter relating to IPO of the Company.

d.   Shareholding of the Directors

          Sr.              Name                  No. of       % of Post
          No.                                    Shares         Issue
                                                               Share
                                                               Capital
          1.    Shri Ballabh Prasad Agarwala     3316820         [●]
          2.    Shri Manoj Kumar Agarwal         4328896         [●]
          3.    Shri Navin Kumar Agarwal         2422784         [●]
          4.    Shri Shekhar Agarwal             2711514         [●]
          5.    Shri Pradeep Kumar Jain            Nil           Nil
          6.    Shri Ajay Kumar Ghosh              Nil           Nil
          7.    Shri Ram Lakhan Prasad             Nil           Nil
                Sinha
          8.    Shri Ajay Kumar Raman              Nil           Nil

Qualification Shares required to be held by our Directors
Our directors are not required to hold any qualification shares.

e. Interest of our Directors
     All our executive directors of the Company are interested to the extent of remuneration paid to them
     for services rendered to the Company.




                                                      85
    All our non executive directors of the Company may be deemed to be interested to the extent of fees,
    if any, payable to them for attending meetings of the Board or Committee thereof as well as to the
    extent of sitting fees and/or reimbursement of expenses payable to them as per the applicable laws.

    Our directors may also be regarded as interested in the shares & dividend payable thereon, if any,
    held by or that may be subscribed by and allotted/transferred to them or the companies, firms and
    trust, in which they are interested as Directors, Members, partners and or trustees. All Directors may
    be deemed to be interested in the contracts, agreements/arrangements entered into or to be entered
    into by us with any Company in which they hold Directorships or any partnership/proprietorship
    firm in which they are proprietor/partners as declared in their respective declarations.

Changes in the Board of Directors during last three years
The changes in the Board of Directors of the Company in last three years are as follows:

    Name of the Director        Date of Change                    Reasons for Change
 Smt. Bina Agarwal               12/02/2007         Appointed as Additional Director
 Smt. Chhavi Agarwal             12/02/2007         Appointed as Additional Director
 Smt. Usha Devi Agarwala         12/02/2007         Appointed as Additional Director
 Smt. Bina Agarwal               01/09/2007         Resigned
 Smt. Chhavi Agarwal             01/09/2007         Resigned
 Smt. Usha Devi Agarwala         01/09/2007         Resigned
 Shri Pradeep Kumar Jain         01/09/2007         Appointed as Additional Director (Independent)
 Shri Ajay Kumar Ghosh           01/09/2007         Appointed as Additional Director (Independent)
 Shri Ram Lakhan Prasad Sinha    01/09/2007         Appointed as Additional Director (Independent)
 Shri Ajay Kumar Raman           01/09/2007         Appointed as Additional Director (Independent0

Payment or Benefit to Promoters or principal shareholder of our Company.
No benefit or payments have been made to any promoters or principal shareholders of the company
except as stated in the terms and remuneration payable as per the compensation agreement entered into
by them and lease rent paid to them in respect land acquired for the proposed project.




                                                    86
f.   Management Organization Structure



                                            Chairman       &   Managing
                                            Director




            Whole Time Director                 Whole Time Director              Whole Time Director
              (Production)                        (Production)                  (Marketing & Finance)




                                                                                      Manager Account
                                                                                        & Taxation
              Manager H.R., Personnel            Company
                 & Administrator                 Secretary

                                                                                       G.M Marketing




          Manager                   Manager              Manager Technical                Manager
         Production                 Logistics            & Quality Control                Marketing



g.   Key Management Personnel
     Our Company is managed by its Board of Directors, and assisted by qualified professionals, with vast
     experience in the field of production/finance/distribution/marketing. The following key personnel
     assist the Management.

Details of the Key Managerial Personnel are as follows:

   Sr.      Name, (Age)     Designatio     Qualification          Date of     Exp.      Previous
  No.                            n                             Appointment              Employer
 1         Mr.A.K.Mishra     Manager-     M.Com                 01/12/1992    19      Amrita
           (41 years)       Accounts &                                        years   Moulding
                              taxation                                                Ltd.
 2         Mr. Anil         Manager-      B.Tech (Food         15/02/1998     26      Parle Biscuits
           Sharma (48       Production    Technology)                         years   Ltd.
           years)
 3         Mr. Arun         Manager-      M.Sc (Maths)         01/03/2002     30      Khemka
           Sharma (57       Mktg &                                            years   Container
           years)           Sales                                                     Ltd.




                                                   87
 4       Mr. D.D.Tyagi     Manager-      B.Sc,      F.M      01/12/1992      30      S.K.B Agro &
         (52 years)        HR,           (Tech)-  Food                       years   Allied
                           Planning &    Technology                                  Industries
                           Administra
                           tion
 5       Mr. Agnimitra     Manager-      B.Sc, Diploma       15/10/2004      18      Dalmia
         (42 years)        Logistics     in Dairy Engg.                      years   Industries
                                                                                     Ltd.
 6.      Mr. Amitabh       Manager-      Mechanical          17/01/2007      11      Sobisco Food
         Ghosh (36         Technical     Engg.,      Post                    years   Pvt. Ltd.
         years)            & Quality     graduate
                           Control       certificate   in
                                         Food
                                         technology
                                         (American Inst.
                                         of baking)
 7       Mr. Rajesh        Company       B.com (Hons)        06/08/2007      14      Essel Shyam
         Sodhi (40         Secretary     FCS                                 years   Technologies
         years)                                                                      Ltd.
 8       Mr. Atul          Head          B.A.                10/09/2007      26      Today Tea
         Salwan (52        Marketing                                                 Ltd.
         years)

Note: None of the key managerial personnel are relatives of the promoters. As on date all the employees
named above are on the roll of our company as permanent employees.

Shareholding of the Key Managerial Personnel:

The Key Managerial Personnel of the Company do not hold any shares in our company as on the date of
this DRHP.

Bonus or Profit Sharing Plan for the Key Managerial Personnel
Currently, we do not have a performance-linked bonus or a profit sharing scheme for key managerial
personnel. However, key managerial personnel are entitled to bonus payable annually. The key
managerial personnel do not have any interest in the Company other than to the extent of the
remuneration of benefits to which they are entitled as per their terms of appointment, reimbursement of
expenses incurred by them during the ordinary course of business and to the extent of Equity Shares held
by them, if any in our Company.

Loans to key managerial personnel
There are no loans outstanding in the name of our key managerial personnel as on 31/03/2007.




                                                  88
Changes in the Key Managerial Personnel in the last one year:
Except for the following, there have been no changes in the Key Managerial Personnel of the Company in
the last three years:

 Sr.             Name                 Designation          Date of Change            Reason
 No
 1.      Mr. Amitabh Ghosh      Manager- Technical &            17/01/2007     Appointed
                                Quality Control
 2.      Mr. Rajesh Sodhi       Company Secretary               06/08/2007     Appointed
 3.      Mr. Atul Salwan        Head Marketing                  10/09/2007     Appointed

h. Employees

      The total manpower directly employed by us as on date is 1200 personnel. Distribution of the
      manpower is as follows:

               Location           Factory              Office                Total
          Unit I & II              1059                 29                   1088
          Lucknow                   81                  07                    88
          Surat                     17                  02                    19
          Hyderabad                 Nil                 03                    03
          Mumbai                    Nil                 02                    02
          Total                    1157                 43                   1200

i.    Disclosures Regarding Employees Stock Option Scheme / Employees Stock Purchase Scheme
      Till date Company has not introduced any Employees Stock Option Schemes/ Employees Stock
      Purchase Schemes.




                                                 89
F) PROMOTERS/ PRINCIPAL SHAREHOLDERS

   1   Shri Ballabh Prasad Agarwala, 59 years, Chairman & Managing
       Director is the founder Director and Promoter of the Company. He is
       having about 35 years of experience in the business and industry. He
       is a well known personality in the biscuit manufacturing industry and
       has received “U.P.Ratan” award for his entrepreneurship. He is
       responsible for overall working of the Company and is instrumental in
       making strategic decisions of the Company. Under his leadership, the
       Company has grown manifold and achieved a “International Quality
       Crown Award, London 2004” for best quality biscuit manufacturer.

       Passport No.                         G0872478
       Voter Identity No.                   UP\77\387\0174329
       Driving License No.                  N.A.

   2   Shri Manoj Kumar Agarwal, 38 years, Whole-time Director has about
       18 years of experience in the business and industry. He is a commerce
       graduate looking after the manufacturing operations and Quality
       Control and is instrumental in increasing the overall biscuit
       manufacturing capacity of the Company.


       Passport No.                         B2970478
       Voter Identity No.                   FJF-9520248
       Driving License No.                  C-0707-38713-N-12-07-2007

   3   Shri Navin Kumar Agarwal, 35 years, Whole-time Director has about
       15 years of experience in the business and industry. He is a commerce
       graduate looking after the manufacturing operations and Quality
       Control of products of the Company.




       Passport No.                         F4245680
       Voter Identity No.                   FJF-9520230
       Driving License No.                  NT-6067-N-16-10-1995

   4   Shri Shekhar Agarwal, 31 years, Whole-time Director has about 10
       years of experience in the business and industry. He is a commerce
       graduate responsible for marketing of products as well as financial
       matters of the Company. He is instrumental in increasing the overall
       turnover & profitability of the Company.




       Passport No.                         G2457776
       Voter Identity No.                   FJF-9520271
       Driving License No.                  NT-6069-N-10-10-1995




                                                90
   The Permanent Account Number, Bank Account Number and Passport Number if any, of all the
   Promoters/ Principal Shareholders have been submitted to BSE and NSE.
   Common Pursuits
   There are no common pursuits amongst Surya Food & Agro Limited and other group companies
   since no other entity is engaged in the line of activity in which company is engaged.
   Interest of Promoters
   All the Promoters who are on the Board of Company may be deemed to be interested to the extent of
   the sitting fees and other remuneration for the services rendered and the reimbursement of expenses,
   if any, payable to them under the articles. The Promoters may also be deemed to be interested to the
   extent of the shares, if any, held by them or by the relatives or by firms or companies of which any of
   them is a partner and a director/member respectively.
   Except as mentioned above the promoters do not have any interest in the business of the company.

Payment or benefit to Promoters of the Issuer Company
   Other than the salary and remuneration of the Promoter Directors, dividend, if any declared by the
   Company on shares held by them, there are no payment or benefit to promoters of the Company.

Related Party Transactions as per Financial Statements
   The details of related party transactions please refer to page no.108 of this Prospectus.

G) CURRENCY OF PRESENTATION
   In this DRHP, all references to “Rupees” “Rs.” are to the legal currency of India and all references to
   “U.S. Dollars”, and “US$” are to the legal currency of the United States.

   Any percentage amounts, as set forth in “Risk Factors”, “Business”, “Management’s Discussion and
   Analysis of Financial Condition and Results of Operations” and elsewhere in this DRHP, unless
   otherwise indicated, have been calculated on the basis of our financial statements prepared in
   accordance with Restated Financial Statements prepared as per Indian GAAP.

   For the convenience of the Shareholders, as far as possible the reporting unit has been maintained as
   Rupees in Lacs (Rupees in Hundred Thousands).

H) DIVIDEND POLICY
   The declaration and payment of dividends in future, if any, will be recommended by the Board of
   Directors and approved by the shareholders, at their discretion, and will depend on a number of
   factors, including but not limited to the earnings, capital requirements and overall financial
   condition.
   For the year 2006-07, the company has declared 10% dividend on the face value of Rs.10/- each.




                                                    91
                                    V: FINANCIAL STATEMENTS

Lead Manager confirms that all notes to the accounts, significant accounting policies as well as well as
auditors’ qualifications (if any) have been incorporated.

A) FINANCIAL INFORMATION OF THE ISSUER COMPANY

                                         AUDITORS’ REPORT


To,
The Board of Directors,
Surya Food & Agro Limited
D-1, Sector-2, Noida.
U.P.-201301.

Dear Sirs,

We have examined the Restated financial information of Surya Food and Agro Limited ('the Company')
annexed to this report for the purpose of inclusion in the Prospectus ('the Prospectus'). The said Restated
Financial information has been prepared in accordance with the requirements of paragraph B(1) of Part-II
of Schedule II to the Companies Act, 1956 ('the Act'), the Securities and Exchange Board of India ("SEBI")-
Disclosure and investor Protection Guidelines, 2000 ('the Guidelines'), as amended vide notification No.
SEBI/CFD/DIL/DIP/14/2005/25/1 dated January 25, 2005 issued by the Securities and Exchange Board
of India in pursuance of Section 11 of the Securities and Exchange Board of India Act, 1992; and related
clarification; and in accordance with the terms of reference received from the Company requesting us to
carry out work in connection with the offer document being issued by the Company in connection with
its Proposed Initial Public Offer ('IPO') of the equity shares. The financial information has been prepared
by the Company and approved by the Board of Directors.

A. Financial Information as per Audited Financial Statement:

We have examined the attached 'Restated Summary Statement of Assets and Liabilities' of the Company
as at 30th September, 2007, 31st March, 2007, 31st March, 2006, 31st March, 2005, 31st March, 2004 and 31st
March, 2003 (Annexure 1 and 4) and the attached 'Restated Summary Statements, Profit and Loss '
(Annexure 2 and 5) and the attached 'Restated Statement of Cash Flows' (Annexure 3 and 6) for Six
months period ended 30th September 2007and each of the years ended 31st March, 2007, 2006, 2005, 2004
and 2003 together referred to as 'Restated Summary Statements'. These Summary Statements have been
extracted from the financial statements of the March, 2003, 2004, 2005, 2006 and 2007 audited by us and
the other auditors of the Company for those years, and have been adopted by the Board of
Directors/Members for those respective years. The financial statements for the Six Month period 30th
September, 2007 have been adopted by the Board of Directors and examined by us. Based on our
examination of these summery statements, we state that:-

i)      The 'Restated Summary Statements' have to be read in conjunction with the notes given in
        Annexure 7 and 8 to this report

ii)     The 'Restated Summary Statements' of the Company have been restated with retrospective effect
        to reflect the significant accounting policies being adopted by the Company as on 30th September,
        2007.




                                                    92
iii)The restated profits have been arrived at after charging all expenses including depreciation and after
         making such adjustment and regroupings as in our opinion are appropriate in the year/period to
         which they are related.

B. Other Financial Information:

We have examined the following information in respect of the Six Months period ended          30th
September 2007 and the year ended 31 st March, 2007, 2006, 2005, 2004 and 2003 of the Company,

proposed to be included in the DRHP/RHP, as approved by the Board of Directors and annexed to this
report:

i)      Restated Schedule of Investments- Surya Food & Agro Ltd. Annexure-9
ii)     Restated Schedule of Rates of Dividend- Surya Food & Agro Ltd. Annexure-10
iii)    Accounting Ratios- Surya Food & Agro Ltd. Annexure-11
iv)     Capitalisation Statement-Surya Food & Agro Ltd. Annexure-12
v)      Statement of Taxation - Surya Food & Agro Ltd. Annexure-13
vi)     Restated Schedule of other income- Surya Food & Agro Ltd. Annexure-14
vii)    Schedule of Loans- Surya Food & Agro Ltd. Annexure-15
viii)   Unsecured Loans- Surya Food & Agro Ltd. Annexure-16
ix)     Schedule of Sundry Debtors- Surya Food & Agro Ltd. Annexure-17
x)      Contingent Liabilities- Surya Food & Agro Ltd. Annexure-18

In our opinion, the 'Financial Information as per Audited Financial Statements' and 'Other Financial
Information' mentioned above for the Six months period ended 30th September, 2007 and for the year
ended 31st March, 2007, 2006, 2005, 2004 and 2003 have been prepared in accordance with Part II of
schedule II of the Act and the Guidelines.

This report should not in any way be construed as a re-issuance or re-drafting of any of the previous
audit report by other firms of Chartered Accountants nor should this be construed as a new opinion on
any of the financial statements referred to herein.

This report is intended solely for your information and for inclusion in the Prospectus in connection with
the proposed IPO of the Company and is not to be used, referred to or distributed for any other purpose
without our prior written consent.

For Vinay Aggarwal & Associates
Chartered Accountants
Sd/-
Vinay Aggarwal
Partner
Membership No. 82045

New Delhi.
Date:22/10/2007




                                                   93
                                                                                                Annexure-1

RESTATED STATEMENT OF ASSETS AND LIABILITIES- SURYA FOOD AND AGRO LTD.
                                                                                                (Rs./ Lacs)
PARTICULARS                        30 SEPT.      31              31         31         31            31
                                     2007      MARCH           MARCH      MARCH      MARCH       MARCH
                                                2007            2006       2005       2004         2003
Fixed Assets
Gross Block                         10908.46        10684.46    6560.96    6288.60    5484.77       3252.07
Less:- Depreciation                  2157.08         1939.47    1554.65    1176.20     721.99        418.10
Net Block                            8751.38         8744.98    5006.31    5112.40    4762.77       2833.97
Capital Work in Progress              649.32          547.15     444.22     244.53       0.00        327.14
Total -A                             9400.70         9292.14    5450.53    5356.93    4762.77       3161.11
Investments- B                       1277.25          872.30     724.99     903.62    1621.65          0.00
Deferred Tax Assets-C                   0.00            0.00       0.00       0.00       0.00          0.00
Current Assets, Loans &
Advances
Inventory                            2022.33         2171.17    2447.05    2099.30    1189.04       2735.16
Sundry Debtors                       2023.20         1009.44     698.44     414.90     219.70        177.51
Cash & Bank Balance                   162.49           78.54     174.39      72.61      69.05         54.68
Loans & Advances                      794.56          876.10    1018.10     852.80     936.22        707.93
Total -D                             5002.58         4135.25    4337.98    3439.61    2414.01       3675.27
Total Assets (A+B+C+D)= E           15680.53        14299.69   10513.49    9700.16    8798.43       6836.38
Liabilities and Provision
Secured Loans                        3362.42         3819.41     363.09      10.13       0.00          0.00
Unsecured Loans                      1125.63          972.09     438.36      95.75       0.00          0.00
Deferred Tax Liabilities              683.58          683.58     630.49     673.92     551.13        413.93
Current Liabilities                  2569.99         1693.15    2160.54    2168.34    1786.67        479.94
Provision                             419.76          200.21     253.15     216.16     174.41        101.14
Total- F                             8161.38         7368.44    3845.63    3164.30    2512.21        995.01
Net Worth (E-F)                      7519.15         6931.25    6667.86    6535.86    6286.22       5841.37
Net Worth Represented by
Share Capital                        1798.50         1798.50      69.17      69.17      69.17         69.17
Reserve & Surplus                    5270.65         5132.75    6598.69    6468.54    6220.44       5776.33
Total                                7519.15         6931.25    6667.86    6537.71    6289.61       5845.50
Less:- Miscellaneous Expenditure
(to the extent not written off          0.00            0.00       0.00       1.85       3.39          4.13
or adjusted)
Net Worth                            7519.15         6931.25    6667.86    6535.86    6286.22       5841.37




                                               94
                                                                                                            Annexure -2

RESTATED STATEMENT OF PROFIT AND LOSSES- SURYA FOOD AND AGRO LTD.
                                                                                                              (Rs./ Lacs)
PARTICULARS                                      Six
                                              Months                       For the Financial Year Ended
                                               Ending           31         31           31           31         31
                                              30 SEPT.        MARCH      MARCH       MARCH         MARCH      MARCH
                                                2007           2007       2006         2005         2004       2003
INCOME
Sales
Of the products          manufactured    by
company                                        17419.61       26856.95    29536.45    28096.90   19601.31       11452.60
Of the products traded by company                  0.00           0.00        0.00        0.00       0.00         678.24
Other Income                                       0.60          81.15       26.65      125.85     119.60         114.13
Increase / ( Decrease) in Inventory                4.71          36.46      (35.30)     149.58     158.84        1295.29
Total                                          17424.92       26974.56    29527.80    28372.33   19879.75       13540.26


EXPENDITURES
Raw Material Consumed                          12077.50       19409.17    20751.64    18159.84   12550.99        8932.73
Staff Costs                                      389.70         499.07      417.84      364.59     179.87         128.34
Other Manufacturing Expenses                    1544.40        2437.03     2607.64     4381.42    2829.38        2230.81
Administrative Expenses                          291.20         653.29      872.68      615.41     388.24         257.09
Selling & Distribution Expenses                 1929.41        3007.66     4337.28     3991.07    2957.38        1723.75
                                               16232.21       26006.22    28987.08    27512.33   18905.86       13272.72


Earning Before Interest and Tax                 1192.71         968.34      540.72      860.00     973.89         267.54
Depreciation                                     225.64         421.32      393.54      479.48     309.97         141.39
Interest                                          69.72         131.37       27.75       13.09       2.60           4.04
Net profit before tax and extra ordinary
items                                            897.35         415.65      119.43      367.43     661.32         122.12
Provision for Taxation
  Current Tax                                    307.16          75.00       19.25       53.72      80.00          11.00
  Deferred Tax                                     0.00          53.09      (43.44)     122.79     137.20          77.18
  Fringe Benefit Tax                               2.29           3.88        7.76        0.00       0.00           0.00
Net profit before extra ordinary items           587.90         283.67      135.86      190.92     444.12          33.94
Extra ordinary items                               0.00           0.00        0.00        0.00       0.00           0.00
Net profit after extra ordinary items            587.90         283.67      135.86      190.92     444.12          33.94
Adjustment on account of prior period
expenses                                          0.00            0.00        5.70     (57.18)       0.00           0.00
Adjusted Profit                                  587.90         283.67      130.16      248.10     444.12          33.94




                                                         95
                                                                                                                             Annexure -3

RESTATED CASH FLOW STATEMENT - SURYA FOOD AND AGRO LTD.
                                                                                                                              (Rs./ Lacs)
     PARTICULARS                                    Six            Year           Year           Year           Year             Year
                                                  months          ended          ended          ended          ended            ended
                                                   ended         31/03/07       31/03/06       31/03/05       31/03/04         31/03/03
                                                  30/09/07
A.   CASH FLOW FROM
     OPERATING ACTIVITIES
     Profit before tax and appropriations            897.35        415.65         113.73         424.61         661.31           122.13


     Adjustments for:
     Depreciation                                    217.61        384.82         378.46         454.21         303.89           139.20
     (Profit)/Loss on sale of Fixed Assets               0.00        0.00           0.00           0.00           0.00             0.00
     Prior period Items & Extra Ordinary Items           0.00        0.00           0.00            0.00          0.00             0.00
     Profit on Sale of Investments                       0.00         0.00           0.00           0.00           0.00             0.00
     Preliminary Expenses written Off.                   0.00        0.00           1.85            1.54          0.74             1.38
     Bad Debts/Advances Written Off/rebates              0.00        0.00           0.00            0.00          0.00             0.00
     Interest expense                                 67.86        122.37          14.16            3.54          0.74             0.30
     Operating Profit before
     Working Capital Changes                        1182.82        922.84         508.20         883.90         966.68           263.01


     Adjustments for:
     (Increase)/Decrease in Sundry Debtors        (1013.76)       (311.00)       (283.54)       (195.20)        (42.19)          (29.16)
     (Increase)/Decrease in Loans and                 81.54        141.99        (165.30)         83.42        (228.29)         1912.47
     Advances                                                -              -              -              -              -             -
     (Increase)/Decrease in Inventories              148.86        275.88        (347.75)       (910.26)       1546.12         (1488.15)
     Increase/(Decrease) in Current Liabilities      789.23       (520.33)         29.19         423.42        1380.00           412.09
     Cash generated from/(used in) operations       1188.69        509.38        (259.20)        285.27        3622.32          1070.26
     Tax Paid                                            2.29       78.88          27.01          53.72          80.00            11.00
     Net cash from/(used in) operating              1186.40        430.50        (286.21)        231.55        3542.32          1059.26

B.   CASH   FLOW           FROM      INVESTING
     ACTIVITIES
     Purchase of Fixed Assets                      (224.00)      (4123.50)       (272.36)       (803.83)      (1905.56)        (1141.76)
     Capital WIP                                   (102.17)       (102.93)       (199.69)       (244.52)           0.00         (215.32)
     Sale of Assets                                      0.00        0.00           0.00            0.00          0.00             0.00
     Investments                                   (404.97)       (147.31)          0.00        (693.88)      (1621.64)            0.00
     Sale of Investments                                 0.00        0.00         178.62        1411.89           0.00             0.00
     Interest received                                   0.00        0.00           0.00            0.00          0.00             0.00
     Dividend received                                   0.00        0.00           0.00            0.00          0.00             0.00
     Net Cash from/(used in) investing             (731.14)      (4373.74)       (293.43)       (330.34)      (3527.20)        (1357.08)
     activities




                                                    96
C.      CASH FLOW FROM
        FINANCING ACTIVITIES
        Interest Expenses                                  (67.86)    (122.37)   (14.16)   (3.54)    (0.74)      (0.30)
        Increase/(Decrease) in secured loans              (456.99)    3456.32    352.97     10.13      0.00       0.00
        Share Capital                                          0.00      0.00      0.00      0.00      0.00       0.00
        Increase/(Decrease) in un-secured loans            153.54      533.73    342.61     95.75      0.00       0.00
        Dividend paid (including dividend tax)                 0.00    (20.29)     0.00      0.00      0.00       0.00


        Net Cash from/(used in) financing
        activities                                        (371.31)    3847.39    681.42    102.34    (0.74)      (0.30)


        Net increase/(decrease) in cash                     83.95      (95.85)   101.78      3.55     14.38    (298.12)
        and cash equivalents
        Cash and Cash equivalents as                        78.54      174.39     72.61     69.05     54.68     352.80
        at the beginning of the year

        Cash and cash equivalent as at the end of
        the year                                           162.49       78.54    174.39     72.61     69.05      54.68

Notes

1.         The Cash flow Statement has been prepared under indirect method as set out in Accounting Standard-3 on Cash
           Flow Statement issued by the institute of Chartered Accounts of India.

2.         Negative figures have been shown in brackets




                                                          97
                                                                                           Annexure-4
CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES-RASTATED
                                                                                            (Rs./ Lacs)
                                   30 SEPT.      31         31         31         31            31
                                     2007      MARCH      MARCH      MARCH      MARCH        MARCH
PARTICULARS
                                                2007       2006       2005       2004          2003

Fixed Assets
Gross Block                         13377.59   12749.68    8338.55    6448.02    5644.19       3252.07
Less:- Depreciation                  2319.66    2071.53    1604.70    1199.94     738.36        418.10
Net Block                           11057.93   10678.15    6733.85    5248.08    4905.82       2833.97
Capital Work in Progress              694.82     587.90     467.88     678.11       0.00        327.14
Total -A                            11752.75   11266.06    7201.73    5926.19    4905.82       3161.11


Investments- B                          0.00      29.81      17.19     180.24    1592.15          0.00


Deferred Tax Assets-C                   0.00       0.00       0.00       0.00       0.00          0.00


Current Assets, Loans & Advances
Inventory                            3064.42    3095.49    3121.48    2099.30    1189.04       2735.16
Sundry Debtors                       2230.68    1068.14     717.14     414.90     219.70        177.51
Cash & Bank Balance                   237.11      85.62     179.15      76.93      69.09         54.68
Loans & Advances                     1207.84    1162.35     654.16    1291.63     832.06        707.93
Cost of Control                         0.00       5.01       5.01      27.36       5.43          0.00
Total -D                             6740.05    5416.60    4676.94    3910.12    2315.32       3675.27


Total Assets (A+B+C+D)= E           18492.80   16712.47   11895.85   10016.55    8813.30       6836.38


Liabilities and Provision
Secured Loans                        4689.71    5288.56    1745.19     336.41       0.00          0.00
Unsecured Loans                      1314.47    1098.09     459.36      21.00       0.00          0.00
Deferred Tax Liabilities              704.16     704.03     651.20     694.50     568.47        413.93
Current Liabilities                  3520.23    2319.84    2256.34    2235.15    1842.51        563.07
Provision                             482.80     204.43     102.98     220.01     158.17         73.26
Total- F                            10711.37    9614.95    5215.07    3507.07    2569.15       1050.26


Net Worth (E-F)                      7781.43    7097.52    6680.79    6509.48    6244.14       5786.12




                                       98
PARTICULARS                                        30 SEPT.       31           31           31           31           31
                                                     2007       MARCH        MARCH        MARCH        MARCH        MARCH
                                                                 2007         2006         2005         2004         2003
Net Worth Represented by
Share Capital                                        1798.50      1798.50        69.17        69.17        69.17       69.17
Reserve & Surplus                                    5982.93      5290.99      6605.78      6436.79      6178.00     5721.08

Minority     Interest(Devika   Food     Products
Pvt.Ltd.)
  Share Capital                                          0.00        0.50         0.50         0.50         0.50        0.00
  Reserves                                              0.00         0.55         0.28         0.03        (0.14)       0.00


Minority Interest ( Surya Fresh Foods Ltd.)
  Share Capital                                          0.00        5.00         5.00         5.00         0.00        0.00
  Reserves                                              0.00         0.90         0.05        (0.16)        0.00        0.00

Minority Interest ( Surya Processed Food (P)
Ltd.)
  Share Capital                                          0.00        1.08         0.00         0.00         0.00        0.00
  Reserves                                              0.00         0.00         0.00         0.00         0.00        0.00
Total                                                7781.43      7097.52      6680.79      6511.33      6247.53     5790.25
Less:- Miscellaneous Expenditure
(to the extent not written off or adjusted)             0.00         0.00         0.00         1.85         3.39        4.13
Net Worth                                            7781.43      7097.52      6680.79      6509.48      6244.14     5786.12

The accompanying significant accounting policies and notes (Annexure -7 ) are an integral part of the Accounts.




                                                        99
CONSOLIDATED           STATEMENT         OF   PROFIT   AND    LOSSES-
RESTATED                                                                                                      Annexure-5
                                                                                                                   (Rs./ Lacs)
PARTICULARS                                       Six
                                                 Months                    For the Financial Year Ended
                                                  Ending
                                                 30 SEPT.       31          31         31            31                31
                                                   2007       MARCH       MARCH      MARCH         MARCH             MARCH
                                                               2007        2006       2005          2004              2003
INCOME
Sales
Of the products manufactured by company           19208.56    29500.01    30032.61     28096.90     19601.31         11452.60
Of the products traded by company                      0.00       0.00        0.00         0.00            0.00         678.24
Other Income                                           8.45      85.63       26.27       125.35       119.60            114.14
Increase / ( Decrease) in Inventory                 185.65      (72.62)      91.21       149.58       158.84           1295.29
Total                                             19402.66    29513.02    30150.09     28371.83     19879.75         13540.27
EXPENDITURES
Raw Material Consumed                             13462.14    20919.25    21122.50     18159.82     12550.99           8932.73
Staff Costs                                         417.01      537.75      433.34       364.59       179.87            128.34
Other Manufacturing Expenses                       1724.37     2539.06     2623.69      4381.43      2829.38           2230.81
Administrative Expenses                             319.03      761.56      831.86       592.01       378.77            257.09
Selling & Distribution Expenses                    2061.06     3388.23     4480.50      3990.58      2959.09           1723.75
                                                  17983.61    28145.85    29491.89     27488.43     18898.10         13272.72
Earning Before Interest and Tax                    1419.05     1367.17      658.20       883.40       981.65            267.55
Depreciation                                        256.17      503.51      426.66       487.04       315.80            141.39
Interest                                            138.38      298.57       61.63        13.09            2.87           4.04
Net profit before tax and extra ordinary
items                                              1024.50      565.09      169.91       383.27       662.98            122.12
Provision for Taxation
 Current Tax                                        350.47       72.06        4.93        55.46           63.76          10.17
 Deferred Tax                                          0.00      52.83     (43.31)       126.03       142.35             77.18
 Fringe Benefit Tax                                    2.38       4.28        8.11         0.00            0.00           0.00
Net profit before extra ordinary items              671.65      435.92      200.18       201.78       456.87             34.77
Extra ordinary items                                   0.00       0.00        0.00         0.00            0.00           0.00
Net profit after extra ordinary items               671.65      435.92      200.18       201.78       456.87             34.77
Adjustment on account of prior period
expenses                                               0.00       0.00        5.70       (57.18)           0.00           0.00
Adjusted Profit                                     671.65      435.92      194.48       258.96       456.87             34.77


Minority in Devika Food Products Pvt. Ltd.             0.00       0.27        0.25         0.17           (0.06)          0.00
Minority in Surya Fresh Foods Ltd.                     0.00       0.82        0.05         0.00            0.00           0.00
Minority in Surya Processed Food (P) Ltd.              0.00       0.00        0.00         0.00            0.00           0.00
Surya Food and Agro Ltd.                            671.65      434.82      194.18       258.79       456.93             34.77




                                                       100
                                                                                                                Annexure-6
CONSOLIDATED CASH FLOW STATEMENT- RESTATED
                                                                                                                 (Rs./ Lacs)

                                                    Six           Year        Year        Year        Year          Year
     PARTICULARS                                  Months         ended       ended       ended       ended         ended
                                                   ended        31/03/07    31/03/06    31/03/05    31/03/04      31/03/03
                                                  30/09/07
A.   CASH FLOW FROM
     OPERATING ACTIVITIES
     Profit before tax and appropriations           1024.50       565.09      139.03      440.45      662.98        122.12


     Adjustments for:
     Depreciation                                    248.13       466.83      404.77      461.58      309.52        139.20
     (Profit)/Loss on sale of Fixed Assets               0.00       0.00        0.00        0.00        0.00           0.00
     Prior period Items & Extra Ordinary Items           0.00       0.00        0.00        0.00        0.00           0.00
     Profit on Sale of Investments                       0.00       0.00        0.00        0.00        0.00           0.00
     Preliminary Expenses written Off.                   0.00       0.00       24.35      (20.53)       0.84           1.38
     Bad Debts/Advances Written Off/rebates              0.00       0.00        0.00        0.00        0.00           0.00
     Interest expense                                133.57       279.78       46.93        3.54        0.74           0.30


     Operating Profit before                        1406.20      1311.70      615.08      885.04      974.08        263.00
     Working Capital Changes


     Adjustments for:
     (Increase)/Decrease in Sundry Debtors        (1165.61)      (333.85)    (319.40)    (195.20)     (42.19)       (29.16)
     (Increase)/Decrease in Loans and                211.79      (210.59)     212.70     (540.08)    (225.58)      1912.47
     Advances
     (Increase)/Decrease in Inventories               31.09        25.99    (1022.18)    (910.26)    1546.12      (1488.15)
     Increase/(Decrease) in Current Liabilities      910.32      (129.10)     458.80      439.93     1386.47        468.17


     Cash generated from/(used in) operations       1393.79       664.15      (55.00)    (320.58)    3638.90       1126.33
     Tax Paid                                         14.65        97.04       29.99       56.17       80.04          11.00
     Net cash from/(used in) operating              1379.14       567.11      (84.99)    (376.75)    3558.86       1115.33
B.   CASH      FLOW     FROM       INVESTING
     ACTIVITIES
     Purchase of Fixed Assets                      (627.91)     (4387.49)   (1480.61)    (803.83)   (1922.44)     (1141.76)
     Capital WIP                                   (106.92)      (143.67)    (199.69)    (678.10)       0.00       (215.32)
     Sale of Assets                                      0.00       0.00        0.00        0.00        0.00           0.00
     Investments                                   (404.97)      (161.54)     (15.58)    (693.88)   (1621.64)          0.00
     Sale of Investments                              29.82         0.00      178.62     1411.89        0.00           0.00
     Interest received                                   0.00       0.00        0.00        0.00        0.00           0.00
     Dividend received                                   0.00       0.00        0.00        0.00        0.00           0.00
     Net Cash from/(used in) investing
     activities                                   (1109.97)     (4692.70)   (1517.26)    (763.92)   (3544.08)     (1357.08)




                                                   101
                                                        Six
     PARTICULARS                                      Months          Year        Year        Year        Year        Year
                                                       ended         ended       ended       ended       ended       ended
                                                      30/09/07      31/03/07    31/03/06    31/03/05    31/03/04    31/03/03
C.   CASH FLOW FROM
     FINANCING ACTIVITIES
     Interest Expenses                                 (133.57)      (279.76)     (46.93)      (3.54)      (0.76)      (0.29)
     Increase/(Decrease) in secured loans              (598.85)      3543.37     1408.79      336.41        0.00        0.00
     Share Capital                                       398.37       150.00        0.00      698.88        0.00        0.00
     Minority Interest                                       0.00       0.00        0.00        0.00        0.00        0.00
     Increase/(Decrease) in un-secured loans             216.38       638.73      342.61      116.75        0.00        0.00
     Dividend paid (including dividend tax)                  0.00     (20.29)       0.00        0.00        0.00        0.00

     Net Cash        from/(used     in)   financing
     activities                                        (117.67)      4032.05     1704.47     1148.50       (0.76)      (0.29)


     Net increase/(decrease) in cash                     151.50       (93.54)     102.22        7.83       14.02     (242.04)
     and cash equivalents


     Cash and Cash equivalents as                        141.70       235.23      133.01      125.17      111.16      352.80
     at the beginning of the year


     Cash and cash equivalent
     as at the end of the year                           293.19       141.70      235.23      133.01      125.17      110.76


Notes
1.      The Cash flow Statement has been prepared under indirect method as set out in Accounting Standard-3 on Cash Flow
        Statement issued by the Institute of Chartered Accountants of India.

2.      Negative figures have been shown in brackets




                                                       102
                                                                                          Annexure - 7
SIGNIFICANT ACCOUNTING POLICIES FOR STANDALONE ACCOUNTS


 1         ACCOUNTING COVENTION

           The financial statements have been prepared generally on mercantile basis and they
           generally comply with the mandatory accounting standards issued by The Institute of
           Chartered Accountants of India.

 2         FIXED ASSETS AND DEPRECIATION

      a)   Expenditure of the capital nature are capitalized at cost comprising of purchase price (net
           of rebates, discount and CENVAT where applicable) and any other cost which is directly
           attributable to bringing the asset to its working condition for the intended use.

      b)   Expenditure incurred during the period of construction is carried forward as capital work
           in progress, and on completion the cost are allocated to the respective fixed assets in the
           ratio of their value.

      c)   Depreciation has been provided on Straight-line method at the rates and in the manner
           specified under Schedule XIV of the Companies Act 1956.

 3         INVESTMENTS

           Long-term investments are stated at cost. Provision, if any, is made for permanent
           diminution in the value of investments.

 4         INVENTORIES

      a)   Stock of raw material is valued at cost or net realizable value, whichever is lower Cost for
           the purpose is identified on the basis of FIFO method.

      b)   Finished goods are valued at cost or net realizable value whichever is lower. Value for the
           purpose is identified on the basis of FIFO basis.

      c)   Packing Materials, Stores and other materials, Power & Fuel (Diesel and LDO) have been
           valued at cost or net realizable value whichever is lower. Value for this purpose is
           identified on the basis of FIFO

 5         CAPITAL GRANTS/ SUBSIDY

           Grants received from the Government are retained as Capital Reserve till the conditions
           stipulated in the respective schemes are complied with. However, the unconditional
           grants/subsidy are deducted from the gross value of the respective assets.

 6         REVENUE AND EXPENSES RECOGNITION

      a)   The company generally adopts the accrual concepts in the preparation of accounts.

      b)   Sales are inclusive of excise duty and net of sales return and trade discount and are
           booked on the basis of dispatches from the factory gate. However at the end of the year


                                               103
         total excise duty included in sales is reduced.

    c)   Sales Tax has been treated as expenses and same is paid to Government on the basis of
         Business used by the Company in manufacturing of biscuits and therefore sale is
         inclusive of Sales Tax

    d)   Claims recoverable on account of insurance are accounted for as and when the amounts
         recoverable can be reasonably determined.

    e)   Expenses are accounted for on an accrual basis except retirement benefits.

7        TAXATION

         Tax expenses (tax saving) is the aggregate of current year tax and deferred tax
         charged(credited) to the Profit and Loss Account for the year. However, in the year of
         transition the accumulated deferred tax liability at the beginning of the year has been
         recognized with a corresponding charge to the General Reserve in accordance with
         Accounting Standard-22 “Accounting for Taxes on Income” and measured at the tax rates
         that have been enacted or substantially enacted by the Balance Sheet Date.

    a)   CURRENT YEAR CHARGE

         The provision for taxation is based on assessable profits of the company as determined
         under the Income Tax Act, 1961. Provisions are recorded as considered appropriate for
         matters under appeal due to disallowances or for other reasons.

    b)   DEFERRED TAX

         The Company provides for deferred tax using the liability method, based on the tax effect
         of timing differences resulting from the recognition of items in the financial statements
         and in estimating its current income tax provision.

         Deferred Tax Assets arising from temporary timing differences are recognized to the
         extent there is reasonable certainty that the assets can be realized in future.

8        FOREIGN CURRENCY TRANSACTIONS

         Foreign currency transactions, other that those covered by forward contracts, are
         accounted for at the exchange rate prevailing on the transaction date. Gain/loss arising
         out of fluctuation in rate between transaction date and settlement date in respect of
         revenue items are recognized in the Profit & Loss Account and in case of fixed assets are
         adjusted to the carrying cost of the respective assets.

         Foreign currency assets and liabilities are restated at the exchange rate prevailing at the
         year end and the overall net gain/loss is adjusted to the Profit & Loss Account, except in
         the case of liabilities relating to the acquisition of fixed assets which are adjusted to the
         carrying cost of the respective assets.


9        RETIREMENT BENEFITS

    a)   Regular contributions of the Company are made to Provident fund and charged to



                                             104
          revenue.

     b)   Leave encashment and gratuity benefits are accounted for on payment basis.

10        BORROWING COST

          Borrowing Costs that are directly attributable to the acquisition, construction or
          production of qualifying assets are capitalized till the month in which the asset is ready
          to use as part of the cost of that asset. Interest on working capital is charged to revenue
          accounts.

11        LEASES

          Leases of Fixed assets where the Company assumes substantially all the benefits and risks
          of ownership are classified as finance leases. Finance leases are capitalized at the estimated
          present value of the underlying lease payments .Each lease payment is allocated between
          the liability and finance charges so as to achieve a constant rate on the finance balance
          outstanding. The corresponding rental obligations, net of finance charges, are included in
          payables. The interest element of the finance charge is charged to the Profit and Loss
          Account over the lease period. Lease rentals in respect of assets taken given on “Operating
          Lease” are charged to the Profit and Loss Account on straight line basis over the lease
          term.




                                               105
SIGNIFICANT ACCOUNTING POLICIES FOR CONSOLIDATED SUMMARY STATEMENTS

1.   BASIS OF ACCOUNTING

     The financial statements have been prepared to comply with the requirements of the Companies Act, 1956,
     under the historical cost convention on the accrual basis of accounting and in accordance with the accounting
     standards issued by the Institute of Chartered Accountants of India as referred to in Section 211 (3C) of the
     Companies Act, 1956.

2.   FIXED ASSETS AND DEPRECIATION

           b)     Expenditure of the capital nature are capitalized at cost comprising of purchase price (net of rebates,
                  discount and CENVAT where applicable) and any other cost which is directly attributable to bringing
                  the asset to its working condition for the intended use.

           c)     Expenditure incurred during the period of construction is carried forward as capital work in progress,
                  and on completion the cost are allocated to the respective fixed assets in the ratio of their value.

           d)     Depreciation has been provided on Straight-line method at the rates and in the manner specified under
                  Schedule XIV to the Companies Act 1956.

           Accordingly Depreciation rates used are as follows:
               Building                                            3.34%
               Plant and Machinery                                 7.42%
               Dies and Tools                                      7.42%
               Office Equipment                                    4.75%
               Furniture and fixtures                              6.33%
               Computers                                           16.21%
               Motor Vehicle                                       9.50%

3.   INVESTMENTS

     Long-term investments are stated at cost. Provision, if any, is made for permanent diminution in the value of
     investments.

4.   INVENTORIES

     a).        Stock of raw material is valued at cost or net realizable value, whichever is lower Cost for the purpose is
                identified on the basis of FIFO method.

     b).        Finished goods are valued at cost or net realizable value whichever is lower. Value for the purpose is
                identified on the basis of FIFO basis.

     c).        Packing Materials, Stores and other materials, Power & Fuel (Diesel and LDO) have been valued at cost or
                net realizable value whichever is lower. Value for this purpose is identified on the basis of FIFO

5.   CAPITAL GRANTS/ SUBSIDY

     Grants received from the Government are retained as Capital Reserve till the conditions stipulated in the
     respective schemes are complied with. However, the unconditional grants/subsidies are deducted from the
     gross value of the respective assets.

6.   REVENUE AND EXPENSES RECOGNITION

     a). The company generally adopts the accrual concepts in the preparation of accounts.




                                                             106
     b). Sales are inclusive of excise duty and net of sales return and trade discount and are booked on the basis of
         dispatches from the factory gate. However at the end of the year total excise duty included in sales is
         reduced.
     c). Sales Tax has been treated as expenses and same is paid to Government on the basis of goods used by the
         Company in manufacturing of biscuits and therefore sale is inclusive of Sales Tax
     d). Claims recoverable on account of insurance are accounted for as and when the amounts recoverable can be
         reasonably determined.
     e). Expenses are accounted for on an accrual basis.

7.   TAXATION:

     Tax expenses (tax saving) is the aggregate of current year tax and deferred tax charged (credited) to the Profit
     and Loss Account for the year. However, in the year of transition the accumulated deferred tax liability at the
     beginning of the year has been recognized with a corresponding charge to the General Reserve in accordance
     with Accounting Standard-22 “Accounting for Taxes on Income” and measured at the tax rates that have been
     enacted or substantially enacted by the Balance Sheet Date.

     a) CURRENT YEAR CHARGE

     The provision for taxation is based on assessable profits of the company as determined under the Income Tax
     Act, 1961. Provisions are recorded as considered adequate for matters under appeal due to disallowances or for
     other reasons.

     b) DEFERRED TAX

     The Company provides for deferred tax based on the tax effect of timing differences resulting from the
     recognition of items in the financial statements and in estimating its current income tax provision.

     Deferred Tax Assets arising from temporary timing differences are recognized to the extent there is reasonable
     certainty that the assets can be realized in future.

     Deferred Tax in respect of timing difference which emerged and are capable of reversal during the tax holiday
     period (as per section 80-IB of the Income Tax Act, )has not been recognized to the extent the gross total income
     of the company subject to such deductions. (As per ASI-3 issued on AS-22 issued by The Institute of Chartered
     Accountants of India)

8.   FOREIGN CURRENCY TRANSACTIONS

     Foreign currency transactions, other than those covered by forward contracts, are accounted for at the exchange
     rate prevailing on the transaction date. Gain/loss arising out of fluctuation in rate between transaction date and
     settlement date in respect of revenue items are recognized in the Profit & Loss Account and in case of fixed
     assets are adjusted to the carrying cost of the respective assets.

     Foreign currency monetary assets and liabilities are restated at the exchange rate prevailing at the year end and
     the overall net gain/loss is adjusted to the Profit & Loss Account, except in the case of liabilities relating to the
     acquisition of fixed assets which are adjusted to the carrying cost of the respective assets.

9.   EMPLOYEES BENEFITS: -

         (a) Regular contributions of the Company are made to Provident fund and charged to revenue.
         (b) Leave encashment and gratuity benefits are accounted for on the basis of actuarial valuation.


10. BORROWING COST

     Borrowing Costs that are directly attributable to the acquisition, construction or production of qualifying assets
     are capitalized till the month in which the asset is ready to use as part of the cost of that asset. Interest on
     working capital is charged to revenue accounts.



                                                           107
11. LEASES

     Leases of Fixed assets where the Company assumes substantially all the benefits and risks of ownership are
     classified as finance leases. Finance leases are capitalized at the estimated present value of the underlying lease
     payments .Each lease payment is allocated between the liability and finance charges so as to achieve a constant
     rate on the finance balance outstanding. The corresponding rental obligations, net of finance charges, are
     included in payables. The interest element of the finance charge is charged to the Profit and Loss Account over
     the lease period. Lease rentals in respect of assets taken given on “Operating Lease” are charged to the Profit and
     Loss Account on straight line basis over the lease term.

12   ACCOUNTING FOR SUBSIDIARIES COMPANIES

     Accounting for subsidiary companies is made in accordance with Accounting Standard – 21” Consolidated
     Financial Statements” issued by the Institute of Chartered Accountants of India.

     Accordingly all assets and liabilities of subsidiary companies have been consolidated with the assets and
     liabilities of parent company, investment in shares of subsidiary companies and their share capital have been
     eliminated, excess of cost of investment in subsidiaries over its net worth is considered as Cost of Control,
     Minorities shares in capital and reserves is shown separately to arrive at correct profits for shareholders of
     parent company.

13   RELATED PARTY DISCLOSURES

            i) List of Related Parties

        *   Mr. Ballabh Prasad Agrawala
        *   Mr. Manoj Kumar Agrawal
        *   Mr. Naveen Kumar Agrawal
        *   Mr. Shekhar Agrawal
        *   Mrs. Usha Devi Agrawala
        *   Mrs. Bina Agrawal
        *   Mrs. Nidhi Agrawal
        *   Mrs. Chhavi Agrawal
        *   B.P. Agrawala (HUF)
        *   Surya Fresh Foods Limited
        *   Devika Food Products Private Limited
        *   Surya Processed Food Private Limited
        *   Surya Agrotech Infrastructure Limited
        *   Surya Shopping Arcade Private Limited

            ii) Joint Ventures
                                 Nil
            iii) Key Management Personnel
               Mr. Ballabh Prasad Agrawala
               Mr. Manoj Kumar Agrawal
               Mr. Naveen Kumar Agrawal
               Mr. Shekhar Agrawal




                                                          108
NAME OF RELATED            Nature of Transaction           SEP.      31.03.200   31.03.200   31.03.200   31.03.200   31.03.200
PARTY                                                   30.09.07             7           6           5           4           3
Subsidiary Company:
1:Devika Food Products     Rent Received                  12.00         24.00       24.00       24.00         9.47        0.00
Pvt. Ltd.
                           Investment In Shares           30.00         29.50       29.50       29.50       29.50         0.00
                           Adv. Rec.For Capital Goods      0.00          0.00        0.00      101.84      120.02         0.00
                           Loan Given                      9.28          0.00        6.34        0.00        0.00         0.00
                           Creditor For Other             61.24         61.24       89.57        0.00        0.00         0.00
2:Surya Fresh Foods Ltd.   Rent Paid                       0.60          1.20        1.20        0.50        0.00         0.00
(SFFL)                     Investment In Shares          698.88        693.88      693.88      693.88        0.00         0.00
                           Unsecured Loan                  0.00          0.00        0.00       95.75        0.00         0.00
                           Sundry Debtors                  0.00          0.00       17.06        0.00        0.00         0.00
3:Surya Processed Foods    Rent Paid                       0.00          0.00        0.00        0.00        0.00         0.00
Pvt. Ltd.
(SPFL)                     Investment In Shares          548.37        148.93         0.00        0.00        0.00        0.00
                           Unsecured Loan                  0.00          0.00         0.00        0.00        0.00        0.00
                           Sundry Debtors                  0.00          0.00         0.00        0.00        0.00        0.00
                           Creditor For Other              3.08          0.00         0.00        0.00        0.00        0.00
Key Managerial
Personnel
 1;Shri Ballabhprasad      Share Application Money            0.00        0.00     104.11         0.00        0.00
Agarwala
                           Unsecured Loan                  0.00        120.34        0.00        0.00        0.00        0.00
                           Renumeration                   21.00         21.00       35.00       36.00       18.00       18.00
                           Capital Invested In SPFL
 2:Sh Manoj Agarwal        Capital Invested In SPFL        0.00          0.15        0.00        0.00        0.00        0.00
                           Unsecured Loan                  0.00         49.27        0.00        0.00        0.00        0.00
                           Loan Given To SPFL              0.19          0.00        0.00        0.00        0.00        0.00
                           Renumeration                    7.00         10.50       36.00       30.00       12.00       12.00
                           Share Application Money         0.00          0.00       54.68        0.00        0.00
 3:Sh Navin Agaarwal       Share Application Money         0.00          0.00       58.44        0.00        0.00
                           Unsecured Loan                  0.00         70.98        0.00        0.00        0.00        0.00
                           Renumeration                   21.00         42.00       36.00       30.00       12.00       12.00
 4:Sh Shekhar Agarwal      Loan Given To SFFL             21.00         21.00       21.00       21.00        0.00        0.00
                           Unsecured Loan                  0.00         47.06        0.00        0.00        0.00        0.00
                           Renumeration                   21.00         42.00       36.00       30.00       11.00        0.00
                           Share Application Money         0.00         42.00       35.48        0.00        0.00
 5:Smt Beena Agarwal       Capital Invested In SPFL        0.00          0.15        0.00        0.00        0.00         0.00
                           Loan Given To SPFL              0.15          0.00        0.00        0.00        0.00         0.00
 1;Shri Ballabhprasad      Share Application Money         0.00          0.00       14.85        0.00        0.00
Agarwala(Huf)
                           Unsecured Loan                     0.00       0.00       14.65         0.00        0.00        0.00
                           Renumeration                       0.00       0.00        0.00         0.00        0.00        0.00
2:Smt. Usha Agarwal        Share Application Money            0.00       0.00       14.33         0.00        0.00
                           Unsecured Loan                     0.00      12.00        0.00         0.00        0.00        0.00
                           Renumeration
3:Smt.Beena Agarwal        Unsecured Loan                     0.00        0.00        0.00        0.00        0.00        0.00
                           Share Application Money
                           Renumeration
4:Smt Chavi Agarwal        Share Application Money            0.00        0.00        3.91        0.00        0.00
                           Unsecured Loan                     0.00        2.00        0.00        0.00        0.00        0.00
                           Renumeration
5:Nidhi Agarwal            Share Application Money            0.00       0.00        4.60         0.00
                           Unsecured Loan                     0.00       2.00        0.00         0.00        0.00        0.00
                           Renumeration                       0.00      16.00       52.34         0.00        0.00        0.00




                                                        109
                                                                                                                             Annexure - 9
RESTATED SCHEDULE OF INVESTMENT- SURYA FOOD AND AGRO LTD.
                                                                                                                                      (Rs./ Lacs)
PARTICULARS                                 Six
                                           months                                     For the Financial Year Ended
                                            Ending
                                           30 SEPT.           31                 31                 31                 31                31
                                             2007           MARCH              MARCH              MARCH              MARCH             MARCH
                                                             2007               2006               2005               2004              2003
EQUITY SHARES
QUOTED                                              0.00             0.00               0.00               0.00              0.00             0.00
              Sub-Total                             0.00             0.00               0.00               0.00              0.00             0.00
UNQUOTED
Equity Share of Devika Foods                       30.00            29.50              29.50              29.50             29.50             0.00
Products Pvt. Ltd. Of Rs.10/- each
Equity Share of Surya Fresh                       698.88           693.88             693.88             693.88              0.00             0.00
Foods Limited of Rs.10/- each
Equity Share of Surya Processed                   548.37           148.92               0.00               0.00              0.00             0.00
Foods Limited of Rs.10/- each
              Sub-Total                         1277.25            872.30             723.38             723.38             29.50             0.00
OTHERS INVESTMENTS
Equity Shares                                       0.00             0.00               1.61             180.24         1592.15               0.00
              Sub-Total                             0.00             0.00               1.61             180.24         1592.15               0.00
Grand Total                                     1277.25            872.30             724.99             903.62         1621.65               0.00


Note: There is no Diminution in value of Investment.



                                                                                                                            Annexure -10
RESTATED SCHEDULE OF RATES OF DIVIDEND- SURYA FOOD AND AGRO LTD.
The detail of dividends declared by the Company is as under:
                                                                                                                              (Rs./ Lacs)
PARTICULARS                          Quarter                                For the Financial Year Ended
                                      Ending
                                     30 SEPT.          31               31                 31                 31                 31
                                       2007          MARCH            MARCH              MARCH              MARCH              MARCH
                                                      2007             2006               2005               2004               2003


No. of Equity Shares                  17984980        17984980              691730             691730             691730            691730
Face Value per Share ( Rs.)               10.00           10.00               10.00              10.00              10.00             10.00
Equity Share Capital                    1798.50         1798.50               69.17              69.17              69.17            69.17
Final Dividend in %                        0.00           10.00                0.00               0.00               0.00              0.00
Amount of Dividend*                        0.00            17.34              0.00               0.00               0.00              0.00
Dividend Tax                               0.00             2.95              0.00               0.00               0.00              0.00




                                                            110
                                                                                                         Annexure -11

ACCOUNTING RATIOS- SURYA FOOD AND AGRO LTD.
                                                                                                              (Rs./ Lacs)
       PARTICULARS                               Six
                                                Months                        For the Financial Year Ended
                                               Ending
                                              30 SEPT.         31           31           31           31             31
                                                2007         MARCH        MARCH        MARCH        MARCH          MARCH
                                                              2007         2006         2005         2004           2003
 1.    Adjusted Profit to Income From               5.15         1.55          0.39         1.31         3.37           1.01
       Operations (%)
 2.    Earnings per Share- (Rs.)                    3.27          16.36       18.82        35.87        64.20              4.91
 3.    Net Asset Value per Shares (Rs.)            41.81         399.71      963.94       944.86       908.77            844.46
 4.    Return on Net Worth (%)                      7.82           4.09        1.95         3.79         7.06              0.58
 5     No. of Equity Shares                     17984980      17984980       691730       691730       691730            691730
 5.    Weighted No. of Equity Shares            17984980       1734063       691730       691730       691730            691730
                                                             See note 3
 6.    Net Worth ( Excluding Revaluation         7519.15       6931.25       6667.86      6535.86      6286.22        5841.37
       Raserve)

Notes:

1.    The ratios have been computed as below:

                                                       Adjusted Profit/(Loss) after tax but before extraordinary items
       Earnings per Shares (Rs.)          =
                                                  Weighted average number of Equity Shares outstanding during the year

                                                                    Net Worth excluding revaluation reserve
       Net Asset Value Per Share (Rs.)    =
                                                  Weighted average number of Equity Shares outstanding during the year


                                                       Adjusted Profit/(Loss) after tax but before extraordinary items
       Return on Net Worth (%)            =
                                                                    Net Worth Excluding revaluation reserve

2.    Profit and Loss as restated has been considered for the purpose of computing the above ratios.
3.    The company had issued 17293250 shares as Bonus issue on 10 -03 -2007. Accordingly Wieghted Average No. of
      Equity Shares has been calculated as follows:

                                              No of                 Weighted
                                              Days                  Average No. of
       Particulars                            hold         Factor   Shares
       691730 Equity Shares                      365            1            691730
       17293250 Bonus Shares                      22         0.06           1042333


       Weighted Average No. of Shares                                        1734063




                                                            111
                                                                                                       Annexure-12
CAPITALISATION STATEMENT- SURYA FOOD AND AGRO LTD.
                                                                                                          (Rs./ Lacs)
                        PARTICULARS                                    Pre-issue as at            Post-issue *
                                                                     September-30, 2007
 Total Debts
 Long Term Debt                                                            3,579.58                 3,779.58
 Short Term Debt                                                            908.47                  908.47
 Total Debt-A                                                              4,488.05                 4,688.05
 Shareholders Fund
 Share Capital                                                             1,798.50                    -
 Reserves and Surplus                                                      6,027.81                    -
 Total Shareholders' Funds-B                                               7,770.23                    -
 Long term debt/Equity Ratio                                                 0.46                      -
  Total Debts/ Equity Ratio                                                   0.58                      -
* Share Capital and reserves and total shareholder's funds would be calculated on conclusion of the Book Building
Process




                                                        112
                                                                                                 Annexure -13

STATEMENT OF TAXATION - SURYA FOOD AND AGRO LTD.
                                                                                                      (Rs./ Lacs)
PARTICULARS                                      Six
                                               months                  For the Financial Year Ended
                                               Ending
                                                     30         31          31          31          31           31
                                                 SEPT.    MARCH       MARCH       MARCH       MARCH        MARCH
                                                   2007       2007        2006        2005        2004         2003
Profit After tax as restated (A)                 897.35     287.56      137.92      248.10      444.12        33.94
Add:Provision For Tax                              0.00      75.00       19.25       53.72       80.00        11.00
Add:Deferred Tax                                   0.00      53.09     (43.44)      122.79      137.20        77.18
Net Profit Before Tax                            897.35     415.65      113.73      424.61      661.32       122.12
Tax Rate                                        33.99%     33.66%      33.66%      36.59%      35.88%       36.75%
Tax as per actual rate on profits                305.01     139.91       38.28      155.36      237.25        44.88
Adjustments
Permanent Differences
Dividend (exempt from tax)                         0.00       0.00        0.00        0.00        0.00          0.00
Indexation difference in Long Term Capital
Gain/Loss                                          0.00       0.00        0.00        0.00        0.00          0.00
Investment write-off.                              0.00       0.00        0.00        0.00        0.00          0.00
Deduction under section 80 IB of the Income
Tax Act, ("the Act")                               0.00        0.00       0.00         0.00        0.00         0.00
Deduction u/s 24 of the Income Tax Act.            0.00        0.00       0.00         0.00        0.00         0.00
Disallowance for donations                         0.00        1.84       5.28         0.22       25.35        11.35
Loss/(Profit) on sale of Fixed Assets              0.00     (21.11)       6.80       (4.22)      (4.50)         0.42
Prior Period Expenses/ Extraordinary Items         0.00        0.00       5.70       36.07         0.00         0.00
Expenses for proposed public issue                 0.00        0.00       0.00         0.00        0.00         0.00
B/F Losses set off                                 0.00        0.00       0.00         0.00    (117.38)         0.00
Total Permanent Difference (B)                     0.00     (19.27)      17.78        32.07     (96.53)        11.77
Timing Difference
Difference between tax depreciation and book
depreciation                                       0.00    (157.74)    (111.40)    (335.67)    (382.44)     (210.01)
Deduction under section 43B of the                 6.32       11.23        9.98        8.87        7.88         7.01
Income Tax Act.
Other Disallowances                                0.00     (52.86)      19.31       16.94        0.00          0.00
Difference in amortisation of preliminary
expenses U/s 35D                                  0.00         0.00        0.00        0.00        0.00         0.00
Total Timing Difference ( C)                      6.32     (199.37)     (82.11)    (309.86)    (374.56)     (203.00)
Total Adjustments D=(B+C)                         6.32     (218.64)     (64.33)    (277.79)    (471.09)     (191.23)
Tax Expense/(Saving) thereon D*Rate Rate          2.15      (73.59)     (21.65)    (101.64)    (169.00)      (70.28)
Net Tax Incidence                               307.16        66.31       16.63       53.72       68.24      (25.40)
Tax Under Mat                                     0.00         0.00        0.00        0.00        0.00        10.17
Tax payable for the year Maximum of Mat or
Tax                                             307.16       66.31       16.63       53.72       68.24         10.17
Interest U/s 234B & 234C (As per Income tax
Return)                                           0.00        9.64        2.60        1.74        0.00          0.00
Total Tax Payable                               307.16       75.95       19.23       55.46       68.24         10.17




                                                    113
RESTATED SCHEDULE OF OTHER INCOME- SURYA FOOD AND AGRO LTD.
                                                                                                    Annexure - 14
                                                                                            (Rs./ Lacs)
PARTICULARS                          Six
                                    Months                 For the Financial Year Ended
                                     Ending
                                    30 SEPT.     31        31          31         31           31         Nature of
                                      2007     MARCH     MARCH       MARCH      MARCH        MARCH         Income
                                                2007      2006        2005       2004         2003
OTHER INCOME
Interest on Fixed Deposits with         0.00      3.08        4.19       0.00        0.00        12.32    Recurring
Banks
Interest on Others                      0.00      0.00        0.00       0.00        0.00         0.19    Recurring
Rent Receipts                           0.60      1.20        1.20       0.50        0.00         0.00    Recurring
Unclaimed Balances with Back            0.00      0.00        0.00       0.65        0.00         0.00      Non
                                                                                                          Recurring
Misc Incomes                            0.00     48.82        1.10       4.37       1.66          0.00    Recurring
Royalty                                 0.00      0.00        0.00     116.11     113.44        101.63    Recurring
Exchange Fluctation                     0.00      6.94       20.16       0.00       0.00          0.00      Non
                                                                                                          Recurring
Profit on Sale of Fixed Assets          0.00     21.11        0.00       4.22        4.50         0.00      Non
                                                                                                          Recurring
             Total                      0.60     81.15       26.65     125.85     119.60        114.14


Net Profit before tax as restated     897.35    415.65      113.73     424.61     661.32         66.04
Percentage of Other Income            0.07%     19.52%     23.43%     29.64%      18.09%      172.84%




                                                     114
       SCHEDULE OF LOANS                                                                         Annexure-15
       SURYA FOOD AND AGRO LTD.                                                                    (Rs./ Lacs)

       PARTICULARS                                                                   30 SEPT.        31
                                                                                       2007        MARCH
                                                                                                    2007
       SECURED LOANS
A.
(i)    Form Bank
       Allahabad Bank                                                                     0.00           2.55
       Term Loan from Allahabad Bank was primarily secured by way of first charge
       on Plant & Machinery excluding of Land & Building of the Unit-II of the
       Company situated at A-1, Udyog Vihar, Greater Noida, U.P.

       This Term loan is further guaranteed by personal guarantee of wholly
       directors of the Company
       State Bank Of India                                                              908.47        1378.03
       (Cash Credit Limit)
       The working capital facilities has been availed from State Bank of India,
       Overseas Branch -1, Jawahar Vayapar Bhawan, Tolistoy Marg, New Delhi,
       Secured by Hypothication of Stock, Spares and Book Debts and Fixed Deposits


       HDFC Bank                                                                          8.98          14.21
       Term Loan from HDFC Bank was secured by Hypothecation of Delivery Van.
       HDFC Car Loan                                                                     21.48           0.00
                                        Total (A)                                       938.93        1394.79

(ii)   From Others
       TML Finance Services                                                               4.55           5.68
       Term Loan from TML Finance Services was secured by Hypothecation of Car.
                                        Total (B)                                         4.55           5.68


B.     DEFERRED PAYMENT LIABILITY
                                                                                       2418.94        2418.94
       New Okhla Industrial Development Authority
       The amount is secured against Commercial Land allotted to the company from
       the Noida Authority.
                                        Total (C)                                      2418.94        2418.94
       Grand Total (A+B)                                                               3362.42        3819.41




                                                     115
                                                                                                    Annexure -16
UNSECURED LOANS- SURYA FOOD AND AGRO LTD.

                                                             (Rs./ Lacs)
Particulars of Loan                          30 SEPT.             31         Rate of       Repayment
                                               2007           MARCH
                                                                2007         Interest      Terms
Unsecured Loan


From:-
Corporate bodies                                704.25            644.25        Nil        On Demand
Promoters/Directors                             421.38            327.84        Nil        On Demand


                                  Total        1125.63            972.09



SCHEDULE OF SUNDRY DEBTORS- SURYA FOOD AND AGRO LTD.                                                        Annexure -17
                                                                                                              (Rs./ Lacs)
PARTICULARS                       Six
                                 months                            For the Financial Year Ended
                                  Ending
                                 30 SEPT.       31               31               31              31             31
                                   2007       MARCH            MARCH            MARCH           MARCH          MARCH
                                               2007             2006             2005            2004           2003
Debts outstanding for a period
exceeding six months
Unsecured, Considered Good            0.00           31.38           18.40              10.37        1.66           6.27
               Total                  0.00           31.38           18.40              10.37        1.66           6.27
Other Debts
Unsecured, Considered Good         2023.21        978.06            680.04            404.53       218.04         171.24
               Total               2023.21        978.06            680.04            404.53       218.04         171.24
           Grand Total             2023.21       1009.44            698.44            414.90       219.70         177.51




                                               116
CONTINGENT LIABILITIES- SURYA FOOS AND AGRO LTD.                                                            Annexure -18
                                                                                                              (Rs./ Lacs)
PARTICULARS                                Six
                                          Months                      For the Financial Year Ended
                                           Ending
                                          30 SEPT.         31         31         31           31                 31
                                            2007         MARCH      MARCH      MARCH        MARCH              MARCH
                                                          2007       2006       2005         2004               2003
Estimated amount of contracts remaining        0.00          0.00       0.00         0.00            0.00           0.00
to be executed on capital account
Claims against the company not                 0.00          0.00       6.07         0.00            0.00           0.00
acknowledged as debts
Counter Guarantees given to bank            2860.00       2860.00    2180.00      2180.00            0.00           0.00
Corporate Guarantee                           15.14         15.14      64.42        28.90            0.66          19.65
                   Total                    2875.14       2875.14    2250.49      2208.90            0.66          19.65




                                                   117
B) FINANCIAL & OTHER INFORMATION OF OUR GROUP COMPANIES

The Companies, which can be classified as our Group Companies are Surya Shopping Arcade Private Ltd
and Surya Agrotech Infrastructure Ltd.

1.   Surya Shopping Arcade Pvt. Ltd. (SSAPL)

     It was incorporated on 22/11/2006 with the Registrar of Companies, NCT of Delhi & Haryana as
     subsidiary of the Company. Thereafter, on 23/03/2007, the Company has transferred its entire
     shareholding     to    individuals      mentioned       herein     below.     Its   registration  No.   is
     U45200DL2006PTC155803. Its authorized and paid up share capital is Rs.10,00,000/-. It is engaged in
     the business of real estate. It’s registered office is situated at R-52, 3rd Floor, Vikas Marg, Shakarpur,
     Delhi-110092.

     Its Board of Directors comprises of below mentioned Directors:

      Mr.Ballabh Prasad Agarwala
      Mrs.Usha Devi Agarwala


     Its shareholding pattern is given below:

      S.       Name                                                   No. of Equity Shares of
      No.                                                             Rs.10/- each
      1        Mr. Ballabh Prasad Agarwala                                                          1
      2        Mr. Manoj Kumar Agarwal                                                        33,333
      3        Mr. Navin Kumar Agarwal                                                        33,333
      4        Mr. Shekhar Agarwal                                                            33,333
                                Total                                                       1,00,000

     Since the Company was incorporated on 22/11/2006 the financial details are not available.
     It has not become a sick company under the meaning of SICA and it is not under winding up.

2.   Surya Agrotech Infrastructure Limited (SAIL)

     It was incorporated on 31/07/2006 with the Registrar of Companies, NCT of Delhi & Haryana and
     obtained Certificate of Commencement of Business on 30/08/2006. It’s registration no. is
     U01403DL2006PLC151452. SSAPL authorized share capital is Rs.1,00,00,000/- and paid-up share
     capital is Rs.5,60,000/- It is engaged in the business of agricultural farming, dairy & horticultural
     products. It’s registered office is situated at E-67 (LGF), Greater Kailash-III (Masjid Moth), New
     Delhi-110048.

     It’s Board of Directors comprises of below mentioned Directors:

      S. No.     Name of the Director
      1.         Mr. Manoj Kumar Agarwal




                                                      118
   2.         Mr. Shekhar Agarwal
   3.         Mr. Navin Kumar Agarwal



  Its shareholding pattern is given below:

   S.      Name                                                 No. of Shares of
   No.                                                          Rs.10/- each
   1       Mrs.Usha Devi Agarwala                               8,000
   2       Mr.Manoj Kumar Agarwal                               8,000
   3       Mr Navin Kumar Agarwal                               8,000
   4       Mr Shekhar Agarwal                                   8,000
   5       Mrs.Bina Agarwal                                     8,000
   6       Mrs.Chhavi Agarwal                                   8,000
   7       Mrs.Nidhi Agarwal                                    8,000
                            Total                               56,000

  Since the Company was incorporated on 31/07/2006, the financial details are not available.
  It has not become a sick company under the meaning of SICA and it is not under winding up.

C) CHANGES IN ACCOUNTING POLICIES IN THE LAST THREE YEARS

  There are no changes in accounting policies of the Company in the last three years.




                                                 119
D) MANAGEMENT’S DISCUSSION AND ANALYSIS
Management’s Discussion and Analysis of Financial Condition and Results of Operations as Reflected
in the Financial Statements

a.   Overview of our Business :

     We are one of the leading manufacturers of Biscuits in India. We are into the business of
     manufacturing and selling of Biscuits for past 15 years. During this period, we have established
     strong manufacturing capabilities and have invested substantially in developing consumer
     preference for our products. Our Biscuits are sold under a well known brand name “Priyagold”.
     Our trademarks/ brands “Hak Se Maango” & “Priyagold” have emerged as one of the most
     powerful brands in FMCG sector. We have continued to invest in the front end on Brands, our
     manufacturing capabilities, deliverables and distribution strength.

     Today we have 4 plants located in Greater Noida & Lucknow (UP) and Surat (Gujarat). We also
     outsource some of our requirements from another plant located in Hyderabad. Our capacities have
     reached 85,000 MT p.a. during this time which alongwith strong brand building and distribution
     capabilities have enabled us to command a sizable market share in the Biscuit market despite
     competition from well established players in the industry.

     We have developed a distribution channel through consignee sales agents / super stockists and
     distributors throughout the country. Though our concentration is largely in the Northern part of the
     country, we have penetrated into the other regions considerably. The brands now have greater
     availability in rural markets in Northern India and also up markets in major cities across pan India.

     After establishing our foothold in Biscuit industry, we have continued to adopt a strategy to identify
     and commercialize profitable growth opportunities by leveraging established brand and distribution
     network. Following this strategy we diversified into manufacturing of fruit juices through our
     subsidiary Surya Fresh Food Pvt. Ltd. The manufacturing facility is located at greater Noida, UP. It
     has a capacity of 130 Kilo Litres/Day and has state of art manufacturing/processing facilities which
     are ISO 9001:2000 certified.

     We have consciously invested in creating markets for fruit juices and have established brands such as
     “Fresh Gold” and “Treat”. Both the brands are also well established and have penetrated into the
     fruit juice market aggressively by commanding considerable market share.

     Recently we have also forayed into the aerated fruit drink segment with a launch of “Fresh Fizzy”
     which is launched into two flavours, Apple and Orange.

     Our sales and marketing team has been working towards innovative and effective marketing tools to
     remain competitive in a fiercely competitive environment. Recently we have won a tender for supply
     of Priyagold Biscuits products and “fresh gold” & “Treat” brands of fruit juices to catering units on
     Indian Railways Stations. This tender is awarded by Indian Railway Catering and Tourism
     Corporation Ltd. (IRCTC) which allows us to set-up food Kiosk for sale of our products at 193
     Railway Platforms which will translate into approximately 300 food Kiosks spread across various
     cities in India. We have commenced establishment of these Kiosks by establishing about 30 Kiosks on
     various Railway Stations and balance would also be functional soon. We will sell other products at
     Kiosks which will give us enhance brand visibility and would contribute considerable to the
     turnover. This initiative has added new dimensions to our marketing and distribution effort recently.




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     In fiscal 2007, we posted consolidated gross sales of Rs. 29513.02 lacs and consolidated profits after
     taxes stood at Rs. 435.92 lacs. In the half year ended 30/09/2007 we have pooled consolidated gross
     sales of Rs. 19402.66 lacs and profit after tax at Rs. 671.65 lacs.

b. Significant Development Subsequent to Last Financial Period
     The Directors confirm that there have been no events or circumstances since the date of the last
     financial statements as disclosed in the DRHP which materially or adversely affect or is likely to
     affect the manufacturing or profitability of our company, or the value of our assets, or our ability to
     pay liabilities within next twelve months.

c.   Factors that may affect Results of Operations
     Except as otherwise stated in this DRHP, the Risk Factors given in this DRHP and the following
     important factors could cause actual results to differ materially from the expectations include, among
     others:
     • General economic and business conditions;
     • Company’s ability to successfully implement its strategy and its growth and expansion plans;
     • Factors affecting industrial activity;
     • stiff competition from established competitors in the food processing industry;
     • Increases in raw materials prices;
     • Cyclical or seasonal fluctuations in the operating results;
     • Amount that the Company is able to realize from the clients;
     • Changes in laws and regulations that apply to the food processing industry;
     • Changes in fiscal, economic or political conditions in India;
     • Social or civil unrest or hostilities with neighboring countries or acts of international terrorism;
     • Changes in the foreign exchange control regulations, interest rates and tax laws in India.

d. Discussion on Results of Operations
     Analysis of Financial Performance of Surya Food and Agro Limited

     The analysis of our financial condition and results of operations for the financial year ending March
     31, 2007, 2006, 2005 respectively including the notes thereto and the reports thereon which appear in
     this DRHP is as follows.
     The Audited Financial Statements are prepared in accordance with the Indian Accounting Standards

                                                                                     (Rs. In Lacs)
              Particulars            March 31,       March 31,        March 31,      March 31,
                                      2007            2006             2005            2004
      Income :
      Turnover                          26856.95           29536.45     28096.90          19601.31
      Other Income                         81.15              26.65       125.85            119.60
      Expenditure :
      Cost of Production                21809.73           23394.58     22391.67          15221.53
      Personnel Expenses                  499.07             417.84       364.59            179.87
      Administrative Expenses            3660.96            5209.96      4606.49           3345.62
      Financial Expenses                  131.37              27.75        13.09              2.60
      Depreciation                        421.32             393.54       479.48            309.97
      Profit Before Tax                   415.65             119.43       367.43            661.32
      Profit After Tax                    283.67             130.16       248.10            444.12




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e.   Comparison of Recent Financial Years / Periods with Previous Financial Years / Periods

     Financial performance for FY 2006-07 vs. FY 2005-06

        i.   Sales: The turnover of the Company during FY 2006-07 was Rs. 26856.95 lacs against
             turnover of Rs. 29536.45 lacs for the year ended 31/03/06, a decrease of 9.07%. The decline in
             sales is mainly due to non renewal of contract with our Company’s job work manufacturers
             at Nadiad and Faizabad. Sales during 1st quarter of FY 2006-07 were very low due to
             operational difficulties on account of fire in the factory at Greater Noida previous year. The
             operations have since stabilized and we are now operating at full capacity utilization.
       ii.   Other Income: The other income of the Company has increased by Rs.54.50 lacs during FY
             2006-07, which is approx. 204% more than previous year. The increase in other income is on
             account of profit on sale of fixed assets to the extent of Rs.21.11 lacs and increase in
             miscellaneous expenses by Rs.47.72 lacs during the year.
      iii.   Financial Expenses: The Financial Expenses have gone up to Rs.131.37 lacs during FY 2006-
             07 from Rs. 27.75 lacs for FY 2005-06 on account of utilization of working capital limits and
             interest on deferred payment liabilities in respect of property secured against commercial
             land allotted to us at NOIDA.
      iv.    Profit After Tax: The profitability is improved on account of reduction in operational cost
             due to better procurement strategy and rationalization of administrative and other expenses.

     Financial performance for the FY 2005-06 vs. Financial Year 2004-05

        i.   Sales: During FY 2005-06 the turnover of the company was increased to Rs. 29536.45 lacs as
             compared to previous year of Rs. 28096.90 lacs on account of aggressive marketing strategy.
       ii.   Other Income: The Company has earned other income of Rs 26.45 lacs for the FY 2005-06 as
             against other income of Rs 125.85 lacs for FY 2004-05. There is decrease in other income by
             Rs.99.40 lacs. The decrease in other income is mainly on account of discontinuation of receipt
             by way of Royalty.
      iii.   Financial Expenses: The Financial Expenses during FY 2005-06 have gone up to Rs. 27.75 lacs
             from Rs 13.09 lacs during previous year which is marginal and higher utilization of working
             capital limits as compared to previous year.
      iv.    Profit after tax: The Profit after tax is at Rs 130.16 lacs for the year ended on 31/03/2006
             against Rs 248.10 lacs for the year ended 31/03/2005. The decrese is attributed mainly to
             increase in selling and distribution expenses and increase in raw material cost.

     Financial performance for the FY 2004-05 vs. FY 2003-04

        i.   Sales: The turnover to the company has gone up from Rs. 19601. 31 lacs for the year ended
             on 31/03/2004 to Rs 28096.90 lacs for the year ended on 31/03/2005. The increase in
             turnover resulted on account of increase in manufacturing capacity during the year from
             45000 MT to 72000 MT. Our Company was able to produce & sell more commensurate to
             market demand.
       ii.   Other Income: The Company has earned other income of Rs 125. 85 lacs for the year ended
             on 31/03/2005 as against other income of Rs 119.60 lacs for the year ended on 31/03/2004.
             The other income has marginally gone up in the year.




                                                    122
      iii.   Financial Expenses: The Interest and Financial Expenses have gone up to Rs.13.09 lacs for the
             year ended on 31/03/2005 from Rs 2.60 lacs for the year ended on 31/03/2004 on account
             higher utilization of working capital limits as compared to previous year.
      iv.    Profit after tax: The Profit After Tax is at Rs 248.10 lacs for FY 2004-05 as against Rs 444.12
             lacs in the year 2003-04. On account of increase in capacity during the year there has been
             increase in quantity of raw material consumed. The prices of raw materials were on the
             higher side during most part of the year. There was also increase in staff cost besides increase
             in distribution expenses.


An analysis of reasons for the changes in significant items of income and expenditure is given
hereunder:

1.   Unusual or infrequent events or transactions

     During FY 2006-07 there was a fire at factory premises at Unit no.I, Plot No. 14, Surajpur, Greater
     NOIDA which resulted in operational difficulties. Besides this there have been no events, other than
     as described in this DRHP, which may be called “unusual” or “infrequent”.

2.   Significant economic changes that materially affected or are likely to affect income from
     continuing operations

     The prices of raw material are prone to fluctuations. Government of India has developed a system of
     institutions with the objective of supporting, controlling and stabilizing food prices in India. These
     institutions declare Minimum Support Price (MSP) for wheat and other essential commodities. Any
     increase in MSP will have impact on the cost of raw material at which the Company is procuring it
     from the market.

3.   Known trends or Uncertainties that have had or are expected to have a material adverse impact on
     sales, revenue or income from continuing operations

     Uncertainty prevails in availability of continuous supply of raw materials of the Company.
     Occasionally, raw materials available are at uneconomical prices, which result in pressure on
     margins. Our profitability will be affected if we could not pass-on such increased cost to the
     customers due to stiff competition. Other than as described in this and as elsewhere mentioned in
     DRHP, there are no known trends or uncertainties that have or had or are expected to have a
     materially adverse impact on revenue or income of the Company from continuing operations.

4.   Future changes in relationship between costs and revenues, in case of events such as future
     increase in labour or material costs or prices that will cause a material change are known

     The cost of our finished products cannot be subjected to any frequent changes due to the peculiar
     nature of our business. Thus any increase or decrease in cost of raw material will have direct impact
     on the margins of the Company. Since the FMCG market is price sensitive, we are not able to pass on
     the increased cost to the customers. In such a case we either have to take burden of this increased cost
     or we have to reduce the weight of the final product. We wish to enter into forward contract for
     continuous supply of raw material to negate the effect of price fluctuation in the raw material prices.
     We are also continuously working to create efficient processes resulting in cost reduction and have a
     better control over its activities. Other than as described in this DRHP, there are no known factors,
     which will affect the future relationship between the costs and income, or which will have a material
     impact on the operations and finances of the Company.




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5.   The extent to which material increases in net sales or revenue are due to increased sales volume,
     introduction of new products or services or increased sales prices
     Government of India recently announced exemption in excise duty on biscuits with MRP of upto Rs.
     100/- per Kg. which has benefited us. Any increase in volumes will be directly increase net sales and
     thus will add to our bottom line. Being in FMCG sector we continuously work on our products
     portfolios to remain competitive. Launch of new products also require additional expenditure on
     account of advertising to popularize the products. Being established in the industry with well
     accepted brands the co-relation between sales and introducing of new products is not very significant
     in our case.

6.   Total turnover of each major industry segment in which the Company operated

     As per MOFPI annual report 2006-07 the total production of biscuits during the year 2006-07 was 4
     Mn Tonnes.

7.   Status of any publicly as announced new products a business segment

     We have not announced any new variety of biscuits recently. However our subsidiary Surya Fresh
     Products Ltd. has forayed into the aerated fruit drinks segment with the launch of “Fresh Fizzy” on
     October 12, 2007. “Fresh Fizzy” was launched in two flavours, apple and orange. Fresh Fizzy is
     available in three pack sizes — one litre, 500 ml and 250 ml.

8.   The extent to which the business is Seasonal

     Our business is not seasonal. The demand for our product is continuous throughout the year
     however we observed considerable jump in sales during festival season.

9.   Dependence on single or few suppliers / customers

     The raw materials are sourced from various suppliers and the finished products are catered to
     numerous customers. Therefore, we are not significantly dependent on a single or few suppliers or
     customers.

10. Competitive conditions

     For details of competitive conditions please refer to Section titled, “Business Overview” on page
     no.55 of this DRHP.




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                               VI. LEGAL AND OTHER INFORMATION

A) OUTSTANDING LITIGATION, DEFAULTS AND MATERIAL DEVELOPMENTS

I LITIGATION INVOLVING COMPANY

The Issuer Company certifies that except as stated herein, there are no

 (a) there are no pending proceedings for offences for non-payment of statutory dues by the promoters
     of the Company.

 (b) there are no cases of litigation pending against the Company or against any other Company in
     which Directors are interested, whose outcome could have a materially adverse effect on the
     financial position of the Company.

 (c) there are no pending litigation against the promoters/ directors in their personal capacities and
     also involving violation of statutory regulations or criminal offences.

 (d) there are no pending proceedings initiated for economic offences against the Directors, Promoters,
     Companies and firms promoted by the promoters.

 (e) there are no outstanding litigation, defaults etc. pertaining to matters likely to affect the operations
     and finances of the Company including disputed tax liability or prosecution under any enactment.

 (f) there are no litigation against the promoters / Directors in their personal capacity.

 (g) the Company, its promoters and other Companies with which promoters are associated have
     neither been suspended by SEBI nor any disciplinary action has been taken by SEBI.

 (h) As per the audited Balance sheet as at March 31, 2007 there are no SSI units to whom, our Company
     owns any sum which is outstanding for more than 30 days. However, there are other creditors to
     whom the Company owes Rs.1-Lakh (Rupees One Lakh) or more which have been duly disclosed
     in the audited financial for the period ended 31st March 2007.

A. Cases filed against the Company

1.   Criminal Cases

 a. Gatoo Traders (the “Complainant”) v. Mr B. P. Agarwal, Chairman & Mr. Shekhar Agarwal,
    Directors of Surya Food & Agro Limited and Surya Food & Agro Limited (the “Accused”)

     The case is filed in the court of Hon’ble Judicial Magistrate Munsifs, Pulwama (Jammu & Kashmir)
     under section 418 read with section 120B of Indian Penal Code, 1960 (IPC).

     The Complainant was appointed as a dealer for distribution of Priya Gold biscuits for District
     Pulwama by the accused from 2005 to 2010. The Complainant alleged that a payment of Rs.
     3,00,000/- vide Demand Draft no. 527263 dated 06.11.2006 was made by him, but the Accused failed
     to supply the goods in trade. The Complainant also alleged criminal intention of cheating the
     Complainant and usurping the draft amount as well as the earlier balance amount.

     The Complainant has prayed for criminal proceedings against the accused. The accused was
     summoned through bailable warrants to the tune of Rs. 10,000/- each.



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     Ad-interim relief order has been issued by the Sub-Judge temporarily restraining the Accused from
     causing any sort of interference through any means with the Complainant’s right to run the
     distribution/dealership of Priya Gold biscuits and juices for Pulwama and Shopian and not to
     supply the same to any other person, agency, firm other than to the Complainant.

     The Company has moved to the Hon’ble High Court, Jammu and Kashmir under Section 482 of
     I.P.C for quashing of complaint case. The matter is pending before Hon’ble High Court.

2.   Central Excise and custom Cases

a.   Surya Food & Agro Ltd & others v. Commissioner of Customs & Central Excise, Noida.

     The Company, manufacturers of “PRIYAGOLD” brand of biscuits ran a promotional scheme for
     retailers during the period between Oct 2001 to March 2002 and retailers were given certain prizes
     based on quantum of sales carried out. At the lowest end of the scheme, a retailer selling biscuits
     worth Rs 1500 would get a wall clock and at the highest end, a retailer selling biscuits worth
     Rs.1,00,000/- would get a L.G colour TV Set. The department demands that clandestinely removal of
     Biscuits worth Rs.4,25,33,087/- has been made during the period and a duty amounting to
     Rs.60,60,087/- demanded u/s 11A of C.E Act and a sum of Rs 60,60,087/- as a penalty under rule 25
     of C.E Rules 2001/2002 imposed upon Company.

     Subsequently, the Company filed an appeal and stay petition before the Hon’ble Customs, Excise &
     Service tax Appellate Tribunal, Delhi [Case No. IV-CE (9)/PREV/NOIDA/ 111/03/PT/130 dated
     20/01/2005]. The case has been set aside by the Hon’ble Customs, Central Excise & Appellate
     Tribunal, Delhi by granting stay vide stay order no 1048-59/2006- Ex dt 24/08/2006 by allowing
     waiver of pre deposit of duties & penalties.

b. Surya Food & Agro Limited (Unit-III) Lucknow and Mr. B.P.Agarwala v. Commissioner, Central
   Excise - Lucknow

     Central excise officers visited the premises of the Company (unit-III) Lucknow on 08/11/2004 and
     compared the physical stock of biscuits & inputs with its recorded stock and found 6002 boxes of
     Priyagold biscuits in excess and laminated roll of 258 Kgs involving unaccounted Cenvat credit of
     Rs.7,492/-. They also found 105 rolls (1494 Kgs) of printed laminated roll of Priyagold brand biscuits
     lying inside the factory premises, which were not accounted for and address of biscuit manufacturer
     was printed as that of M/s I. K. Foods products, Faizabad. The Central excise officers then valued the
     seized biscuits worth Rs. 13,08,502/- and demanded duty on finished goods and input materials.


     Duty/Penalty/Fine involved against the Company is as under:
     Redemption fine: Rs 2,62,000/- & 68,000/-;
     Penalty: Rs 1,04,680/-, 7,491/- & 44,253/-; and
     against Mr. B.P.Agarwala a penalty Rs 1,56,425/-.

     Subsequently, the Company filed an appeal and stay petition before the Hon’ble Customs, Excise &
     Service tax Appellate Tribunal (Case No. V (MP)(15)seizure/30/05/128788 dated 13.5.2007) against
     Order-in-appeal No 45/CE/07 dt 27/04/07 of Learned Commissioner(Appeal), Lucknow




                                                   126
c.   Surya Food & Agro Limited & Shekhar Agarwal v. Commissioner, Customs & Central Excise

     The Company had purchased imported ‘Bakery Shortening’ on high seas sale basis from M/S
     Kanpur Edibles Pvt. Ltd. which has been exempted from duty of customs under Indo-Sri Lanka Free
     Trade Agreement vide Notification no. 26/2000 – Cus dated 1/03/2000.

      The Company filed a bill of entry for the goods imported and accordingly got them cleared under
     the above notification which later was denied by the Commissioner as the import was in violation of
     condition (4) of the notification and custom duty was demanded.

     Duty Involved: Rs 26,20,757/- on the Company, Rs 50,00,000/- towards fine and Rs 10,00,000/-
     towards penalty on the Company, and Rs.10,00,000/-penalty imposed on Shri Shekhar Agarwal,
     Director of the Company.

     Hence, the Company filed an appeal before the Hon’ble Customs, Excise & Service Tax Appellate
     Tribunal [Case No. VIII (6) DRI/LZU/73/2006(Main) 649 dated 08/01/2007], which set aside the
     order-in –original No 11/Commn/2006-07 dt 26/03/2007 passed by the Commissioner of Customs
     & Central Excise, Kanpur, and granted a stay vide stay order no. 361-364/07 dated 31/07/07 in
     favour of the Company.

     The Company has pre deposited a sum of Rs. 1,29,24,815/- vide TR-6 challan.

     The Company has informed that the case has been set-aside by the Hon’ble Customs, Central Excise
     & Appellate Tribunal, Delhi vide their final order no. 387-390/07 dated 03/08/2007 in favour of the
     Company.

     The Company has made a refund claim of the pre-deposit amount with the Assistant Commissioner,
     Central Excise & Customs, Kanpur.

d. Customs and Central Excise, Kanpur (through DRI Lucknow) v. Shekhar Agarwal,                Director
   Surya Food and Agro Ltd. & others

     The Company purchased Bakery Shortening on High Sea Sale basis from M/s Kanpur Edibles Pvt
     Ltd and cleared through ICD, Kanpur, exempted from customs duty under Indo-Sri Lanka Free
     Trade Agreement vide Notification No. 26/2000 – Cus dated 1.3.2000. The Company filed the Bill of
     Entry for the goods imported and cleared accordingly under the said notification but later the
     Commissioner denied the benefit of the exemption notification.

     A Penalty was imposed on appellant of Rs 10,00,000/- U/S 129 B of Customs Act, 1962. Mr. Shekhar
     Agarwal filed an appeal to the Appellate Tribunal vide Case No.VIII(6) DRI/ LZU/ 73/2006 in the
     Customs, Excise & Service Tax Appellate Tribunal for granting Stay. In their final order No-387-390
     dated 03/08/2007 the Hon’ble Tribunal has set-aside the order of Commissioner Customs and
     Central Excise, Kanpur and allowed stay with consequential relief.

e.   Surya Food & Agro Limited v. Commissioner, Customs & Central Excise, Kanpur

     The Company imported 950.400 M.T of Speciality Fats Bakery Shortening form Sri Lanka and cleared
     the goods from I.C.D Kanpur. The Company claimed for concessional rate of customs duty under
     ISFTA and Central Excise Notification 03/2006 dated 01/03/2006 for nil rate of countervailing duty.
     Later the Commissioner of Customs and Central Excise, Kanpur demanded a differential customs




                                                  127
     duty amounting to Rs 28,30,897/- on the imported Qt. of 950.400 M.T Bakery Shortening having
     assessable value of Rs. 3,27,03,977/-.

     Subsequently, the Company filed an appeal before the Hon’ble Customs, Central Excise & Service
     Tax Appellate Tribunal [Case No : VIII(10)/101-Cust/Adj/SF & A/2006/20347 dated 02/11/2006],
     which set-a-side the Order-in-original no 10/cust/comm/Adj/2006-07/2379 dt 28/02/2007 passed
     by Learned commissioner, Customs & Central Excise, Kanpur by granting stay, vide Order no
     358/07 dt 31/07/2007.

f.   Surya Food & Agro Limited v. Assistant Commissioner of Customs, ICD, Juhi Railway Yard,
     Kanpur

     The Company imported 280.80 M.T Bakery Shortening on high seas sale basis from Sri Lanka and
     cleared the goods at customs at Nil rate of customs duty under customs notification no 26/2000 Cus
     dt 01/03/2000. The department has denied the notification and charged differential duty for Rs
     82,19,877/-. An order dated 07/07/2007 was passed for the same by the office of Assistant
     Commissioner of Customs, Inland Container Depot, Juhi Railway Yard, Kanpur vide order dated
     07/07/2007.

     An application for stay and waiver of pre-deposit of Rs. 82,19,877/- towards customs duty u/s 129E
     of the Customs Act, 1962 was filed before the Commissioner of Customs (Appeals), Kanpur by the
     Company on 20.08.2007 [Case No. VIII(6)/ ICD /JRY/CUS/KNP-06-07/276/07 dated 21/12/2006].

g. Surya Food & Agro Ltd (Unit-II) & others v. Assistant Commissioner of Central Excise, Division-
   IV, Noida

     Central Excise officers of Commissionerate, Lucknow visited the factory premises of Lucknow unit of
     the Company on 08/11/2004 and found that 105 rolls of printed laminated roll of Priya gold brand
     biscuits, with address of M/s I.K.Foods Products, Faizabad, were lying on the floor of factory
     premises, unaccounted for. The said goods were transported from Noida unit under G.R no 20095
     dated 06/11/2004 of M/s Parthrayan transport company, Ghaziabad and were covered by a proper
     duty paid document. The Central excise officer demanded Rs. 44,253/- as central excise duty on the
     value of goods worth Rs. 2,71,161/- and alleged that goods were kept in the Lucknow unit with an
     intention to use them in manufacture of finished goods, and remove such goods clandestinely
     without payment of central excise duty. The goods involved are Printed Laminated Rolls for Priya
     Gold Brand Biscuits classifiable under Chapter heading 3920.36 of the schedule to the Central Excise
     Tariff Act, 1985.

     An appeal was filed against the order of Assistant Commissioner of Central Excise, Division-IV,
     Noida (U.P.) [Case No. V(30) AE/Surya N IV/SCN/277/07/2992 dt 26/04/2005] against Order-in-
     Original No.14/AC/Noida-IV/2007 dated 13.6.2007, issued from C. No. V (30)
     AE/Surya/SCN/277/05.

      Case is pending in the office of Commissioner (Appeal) Customs & Central Excise, Noida, and
     awaiting for the order of the Commissioner (Appeal).

3. Service Tax Cases

a. Surya Food & Agro Limited v. Deputy Commissioner Central Excise, Division-IV, Noida.

     The Company had entered in to an agreement with M/s I.K.Foods, Faizabad, for using trademark
     and design of “Priyagold” Brand and M/S I.K.Foods will pay royalty to the Company for the same.



                                                   128
     The Central Excise Department raised a demand of service tax on royalty received by the Company
     as services rendered by the Consulting Engineering Firm.

     Arising out of the Order – in –Appeal No. 86/CE/APPL/NOIDA 05 dated 09.06.2005 passed by the
     Commissioner of Customs & Central Excise (Appeals), Noida, two appeals (one filed by the Revenue
     and the other by the Comapany.) were filed before the Customs, Excise and Service Tax Appellate
     Tribunal.

     The issue raised was whether the services rendered by the Company by authorizing the use of their
     trademark and design for manufacture of biscuits, vide their trademark use agreement entered into
     by them with M/s Devik Foods and M/s I.K. Food Products, would amount to services rendered by
     a Consulting Engineering Firm.

     It was held by the said Tribunal that the assessee cannot be said to have rendered any service which
     could be categorized as service by a Consulting Engineer as the assessee had only permitted the use
     of their trademark and while doing so, they have provided technical know-how which cannot be
     equated to a service rendered by the Consulting Engineer or by a Consulting Engineering Firm. The
     said case (Case no V (30) SCN.STAX/Surya/N-IV/218//04/ Dt 19.05.04) has been decided in favour
     of the Company vide Final order no. 107-108/06-ST, Central Excise & Service Tax Appellate Tribunal.

b. Surya Food & Agro Limited v. Commissioner of Customs & Central Excise, Noida.

     The Company had entered in to an agreement with M/s I.K.Foods, Faizabad, for using trademark
     and design of “Priyagold” Brand and M/S I.K.Foods will pay royalty to the Company for the same.
     The Central Excise Department has raised a demand of service tax on royalty received by the
     Company as services rendered by the consulting Engineering Firm. The case involves a penalty
     amounting to Rs. 508172 & Rs. 907537

      The Case No. C.No V (30) S.Tax/S.C.N/N-IV/4642-441 Dt 25.06.04 & V(30) Dem/ST/Surya/ N-
     IV/05/4315-18 dt 13.06.2005) is pending in the office of Commissioner (Appeal), Customs & Central
     Excise, Noida. Order is awaiting.

c.   Surya Food & Agro Limited v. Assistant Commissioner, Customs & Central Excise, Division-IV,
     Noida

     The Company availed the CENVAT credit of service tax leviable and paid on inward transportation
     of inputs and capital goods and outward transportation (upto the place of removal) from 01/01/2005
     to 15/06/2005 on the basis of service tax paid on T.R-6. The said document was made as prescribed
     document under rule 9 of Cenvat Credit Rules, 2004 from 16/06/2005 under notification No 28/2005
     – Ce (N.T) dt 16/06/2005. The Central Excise Department denied the CENVAT credit of service tax
     on inputs for the period 01/01/2005 to 15/06/2005. The amount involved in the case towards service
     tax liability is Rs 4,42,464/- and Rs 4,53,446/- .

     The Case no: V (30)/St/Adj/N-IV/428/06/2094 Dt 26-03-2007 & V(30)/St/Adj/N-IV/427/062094 dt.
     26/03/200 is pending in the office of Assistant Commissioner, Customs & Central Excise, Division-
     IV, Noida.

4.   Civil Cases

a.   Peetam Singh & others v. Surya Food & Agro Limited & others

     Case no. M.A.C.T no. 64/2006 in the Court of Hon’ble District Judge, Gautam Budh Nagar, U.P.



                                                   129
     Mr. Subhash Singh s/o Mr. Peetam Singh was hit by a truck (No.-U.P.-169112) owned by the
     Company and had died in the accident. The present suit was instituted on February 6, 2006 and a
     notice was issued. Insurance Company has been made a party in this case and the Company is the
     2nd party. The matter is pending before Hon’ble Court.

b. Virendra Kumar v. Surya Food & Agro Ltd.

     Case no. 276/2004 in the District Consumer Redressal Forum, Mujaffarnagar (U.P).

     The Complainant purchased a packet of Priyagold biscuits and on opening it found some insects.
     Thereafter, he filed a complaint with the Consumer Forum and made a demand of Rs. 1,12,500/- as
     compensation.

     The Company has informed us that no further communication has been sent by the Consumer Forum
     after notice dated July 31, 2006.

c.   Raj Kumar Sharma v. Surya Food & Agro Ltd.

     Case no. 140/2007 and 326/2007 in the Court of Hon’ble Assistant Labour Commissioner, Sector-3,
     Noida, Dist. Gautam Budh Nagar.

     The abovementioned case was filed under Section 15 (2) and Section 16 of the Payment of Wages Act,
     1936 for delay in payment of wages. The Company has informed us that the hearing of the said case
     has been completed and order has been reserved.

      Amount involved in the said case is Rs. 4,14,338.

d. M/s Shiv Bholey, Roller Flour Mills, Pvt. Ltd. v. M/s Surya Food and Agro Ltd.

     Case in the Court of the Hon`ble Civil Judge (Sr. Div.), Hissar.

     The Complainant who runs a roller flour mills and manufactures wheat flour, maida, suji and bran
     etc. has filed a recovery suit against the Company.

     The representative of the Company approached the Complainant and requested him to supply maida
     to them on credit basis for manufacture of biscuits. The Complainant supplied maida to the Company
     during the period 14/08/2003 to 23/10/2003, making a total sale of Rs. 12,15,200/-. Out of which
     Rs.10,68,210/- was paid to the Complainant vide different cheques payable at Hisar. As per the terms
     of the sale, the Company was to make the payment of goods within a period of one week of the date
     of sale and in case of delay/default, the Company was liable to pay interest @18% per annum to the
     Complainant from the date of sale till the date of actual payment of the amount due. The Company
     failed to make the payment as per the terms of the sale and was served a legal notice of demand on
     23/02/2005 calling the Accused to make the payment of outstanding amount of Rs.1,46,989/-
     together with interest @ 18% p.a. up to the date of payment amounting to Rs 2,19,750 in addition to
     further interest on the amount of Rs. 2,19,750/- from 01/08/2006 till the date of actual payment of the
     amount.

     The Complainant has prayed for a judgment and decree in favor of the Complainant and against the
     Company for Rs. 2,19,750/- being the amount due with costs and future interest @ 18% per annum
     from the date of institution of suit till its actual realization.




                                                     130
      The case is pending before the Hon`ble Court and the Company has informed us that the next date of
      hearing is October 30, 2007.

B. Cases filed by the company

1. Civil Cases

 a.   Surya Food & Agro Limited v. Sanjay Dubey

      Appeal No 1378/2005 pending before the Hon’ble State Consumer Dispute Redressal Commissioner,
      Bhopal, M.P. for adjudication. State Commission has issued a stay Order against the complaint case

II LITIGATION INVOLVING PROMOTERS/DIRECTORS

A. Cases filed against the Promoters/Directors

 1.   Criminal Cases

 a.   Gatoo Traders (the “Complainant”) v. Mr B. P. Agarwal, Chairman & Mr. Shekhar Agarwal,
      Directors of Surya Food & Agro Limited and Surya Food & Agro Limited (the “Accused”)

      The case is filed in the court of Hon’ble Judicial Magistrate Munsifs, Pulwama (Jammu & Kashmir)
      under section 418 read with section 120B of Indian Penal Code, 1960 (IPC).

      The Complainant was appointed as a dealer for distribution of Priya Gold biscuits for District
      Pulwama by the accused from 2005 to 2010. The Complainant alleged that a payment of Rs.
      3,00,000/- vide Demand Draft no. 527263 dated 06.11.2006 was made by him, but the Accused failed
      to supply the goods in trade. The Complainant also alleged criminal intention of cheating the
      Complainant and usurping the draft amount as well as the earlier balance amount.

      The Complainant has prayed for criminal proceedings against the accused. The accused was
      summoned through bailable warrants to the tune of Rs. 10,000/- each.

      Ad-interim relief order has been issued by the Sub-Judge temporarily restraining the Accused from
      causing any sort of interference through any means with the Complainant’s right to run the
      distribution/dealership of Priya Gold biscuits and juices for Pulwama and Shopian and not to
      supply the same to any other person, agency, firm other than to the Complainant.

      The Company has moved to the Hon’ble High Court, Jammu and Kashmir under Section 482 of
      I.P.C for quashing of complaint case, the next date of hearing is October 16, 2007.

 b.    Suresh Kumar Bagri, Proprietor (the “Complainant”) v. Shri Shekhar Agarwal, Director, Surya
       Food & Agro Limited.

       Case no. C-1/91/2005 under Section 420/406/506 of the Indian Penal Code (IPC) in the Court of
       Chief Judicial Magistrate at Jamshedpur.

       The Complainant being a businessman was interested for dealership of the products of the
       Company for the Dhanbad region, within the Jharkhand State in the name of “Mahalaxmi
       Enterprises”. Complainant deposited a sum of Rs. 2,50,000/- as security deposit, for the purpose of
       getting the dealership of the products of the Company, in the UTI Bank Ltd., Jamshedpur
       (hereinafter referred to as ‘Bank’) and got a demand draft no. 042994 dated 9/4/2003 drawn on the



                                                   131
           Bank for delivering the same to the Company for the said purpose. The case of the Complainant is
           that he was neither awarded the dealership, nor was the deposited amount refunded to him.

           The Complainant has alleged criminal breach of trust by the Company claiming that the Company
           has misappropriated the aforesaid amount and that in spite of receipt of notice on 20/12/2004.

           The Company has informed us that the conciliation proceedings between the parties are under
           process for resolving the matter.

     c.    Mr. Shekhar Agarwal, Director, Surya Food & Agro Limited v. State of        Jharkhand        Suresh
           Kumar Bagri, Proprietor of M/s S.K. Enterprises

           Case no. A.B.A. No. 44/2007 in the High Court of Jharkhand at Ranchi.

           The petition was filed on 29/11/2006 for grant of Anticipatory Bail to the petitioner as he was
           seriously confronted with the risk of being arrested or taken into custody upon his surrender in
           connection with Case No. C-1 91/2005 registered under Sections 420, 406 and 506 of IPC.

           A prayer has been made before the Court for the release of the petitioner in the event of his arrest/
           surrender.

     d.     M/s Kiri Associates Pvt. Ltd. (the “Complainant”) v. Mr. B. P. Agarwala, authorized signatory,
           ISKCON & others (the “Accused”).

           The case is filed in the Court of Hon’ble C.J.M Court, Panipat under Section 138 of the Negotiable
           Instruments Act, 1881.

           The Accused is a member and authorized signatory of the religious institution “ISKCON” which
           passed the tender of the Complainant and awarded them the work for the construction of the
           temple cum devotees boarding and lodging facility at A-5, Sector-33, Noida, U.P. Running bills for
           the construction were given to the Accused on different dates. To discharge their liability, the
           Accused issued a cheque bearing no. 267227 dated 12/01/2005 drawn on ICICI Bank Ltd. Noida
           Branch, G-31 & 32, Sector-18, Noida – 201 301 (U.P.) amounting to Rs. 4,89,500/- from their bank
           SBGEN a/c no. 003101061819. The Complainant presented the said cheque in his bank, Bank of
           India, East of Kailash Branch, New Delhi for encashment on 12/01/2005. The said cheque was
           dishonored by bankers of the Accused vide memo dated 13/01/2005 on account of “Insufficient
           Funds” followed by two similar dishonors.

           Thereafter, the Complainant sent a legal notice to the Accused through his advocate, demanding
           the amount due within 15 days. The Complainant prayed that the Accused be directed to make the
           payment of cheque to the Complainant. The Company has informed us that there is no further
           communication from the Court.

2.         Central Excise and custom Cases

      a.    Surya Food & Agro Limited (Unit-III) Lucknow and Mr. B.P.Agarwala v. Commissioner,
             Central Excise - Lucknow

           Central excise officers visited the premises of the Company (unit-III) Lucknow on 08/11/2004 and
           compared the physical stock of biscuits & inputs with its recorded stock and found 6002 boxes of
           Priyagold biscuits in excess and laminated roll of 258 Kgs involving unaccounted Cenvat credit of
           Rs.7,492/-. They also found 105 rolls (1494 Kgs) of printed laminated roll of Priyagold brand



                                                        132
     biscuits lying inside the factory premises, which were not accounted for and address of biscuit
     manufacturer was printed as that of M/s I. K. Foods products, Faizabad. The Central excise officers
     then valued the seized biscuits worth Rs. 13,08,502/- and demanded duty on finished goods and
     input materials.

     Duty/Penalty/Fine involved against the Company is as under:
     Redemption fine: Rs 2,62,000/- & 68,000/-;
     Penalty: Rs 1,04,680/-, 7,491/- & 44,253/-; and
     against Mr. B.P.Agarwala a penalty Rs 1,56,425/-.

     Subsequently, the Company filed an appeal and stay petition before the Hon’ble Customs,
     Excise & Service tax Appellate Tribunal (Case No. V (MP)(15)seizure/30/05/128788 dated
     13.5.2007) against Order-in-appeal No 45/CE/07 dt 27/04/07 of Learned Commissioner(Appeal),
     Lucknow.

b.   Surya Food & Agro Limited & Shekhar Agarwal v. Commissioner, Customs &            Central Excise

     The Company had purchased imported ‘Bakery Shortening’ on high seas sale basis from M/S
     Kanpur Edibles Pvt. Ltd. which has been exempted from duty of customs under Indo-Sri Lanka
     Free Trade Agreement vide Notification no. 26/2000 – Cus dated 1/03/2000.

      The Company filed a bill of entry for the goods imported and accordingly got them cleared under
     the above notification which later was denied by the Commissioner as the import was in violation
     of condition (4) of the notification and custom duty was demanded.

     Duty Involved: Rs 26,20,757/- on the Company, Rs 50,00,000/- towards fine and Rs 10,00,000/-
     towards penalty on the Company, and Rs.10,00,000/-penalty imposed on Shri Shekhar Agarwal,
     Director of the Company.

     Hence, the Company filed an appeal before the Hon’ble Customs, Excise & Service Tax Appellate
     Tribunal [Case No. VIII (6) DRI/LZU/73/2006(Main) 649 dated 08/01/2007], which set aside the
     order-in –original No 11/Commn/2006-07 dt 26/03/2007 passed by the Commissioner of Customs
     & Central Excise, Kanpur, and granted a stay vide stay order no. 361-364/07 dated 31/07/07 in
     favour of the Company.

      The Company has pre deposited a sum of Rs. 1,29,24,815/- vide TR-6 challan.

      The Company has informed that the case has been set-aside by the Hon’ble Customs, Central
     Excise & Appellate Tribunal, Delhi vide their final order no. 387-390/07 dated 03/08/2007 in
     favour of the Company.

     The Company has made a refund claim of the pre-deposit amount with the Assistant
     Commissioner, Central Excise & Customs, Kanpur.

 c. Customs and Central Excise, Kanpur (through DRI Lucknow) v. Shekhar Agarwal, Director Surya
     Food and Agro Ltd. & others

     Case No.VIII(6) DRI/LZU/73/2006 in the Customs, Excise & Service Tax Appellate Tribunal

      Shekhar Agarwal filed an appeal to the Appellate Tribunal vide Case No.VIII(6) DRI/ LZU/
     73/2006 in the Customs, Excise & Service Tax Appellate Tribunal for granting Stay. In their final
     order No-387-390 dated 03/08/2007 the Hon’ble Tribunal has set-aside the order of Commissioner



                                                 133
      Customs and Central Excise, Kanpur and allowed Stay with Consequential Relief. Penalty was
      imposed on appellant of Rs 10 lakhs U/S 129 E of Customs Act, 1962.

3.   Civil Cases

a.    Sarin Kumar (the “complainant”) v. Managing Director, Surya Food and Agro Ltd. & others.

      Case in the District Consumer Redressal Forum, Jind.

     The complainant purchased a sealed packet of Priya Gold, Milk Butter Biscuits from Mr. Rakesh
     Kumar vide bill dated 7.10.2006. On 9.10.2006 the complainant opened the packet and ate some
     biscuits after which he started feeling uneasy. On carefully examination, he found hair in the biscuits
     after which he started vomiting and experienced severe abdominal pain the same night and on the
     next date i.e. 10.10.2006, the complainant took treatment from General Hospital, Narwana. On
     further examination, the complainant found that the batch no. and the manufacturing date were not
     mentioned on the packet as per norms issued by the Government of India.

     A complaint was filed under Section 12 of the Consumer Protection Act, 1986 against the Company
     on 24.10.2006. The complainant prayed that the Company be punished under the law and be
     directed to pay a compensation of Rs. 50,000 to the complainant with costs.

b.   Against Mr. Pradeep Kumar Jain (Independent Director)

     On October 29, 2004, Mr. Khem Chand and Mr. Inder have filed a suit (Suit No. 321/04) in the Court
     of Civil Judge, Senior Division, Gurgaon, against Honey Builders Private Limited (“Honey
     Builders”) and Mr. Pradeep Kumar Jain, claiming ownership of property located in Tehsil Sohna,
     Gurgaon, that Honey Builders had purchased from Mr. Itwari via a sale deed dated September 22,
     2004.

     Honey Builders has filed a written statement, submitting that the property was purchased as
     bonafide purchaser for valuable consideration without notice and the same has been registered. The
     next date of hearing is September 20, 2007

c.   Against Mr. Pradeep Kumar Jain (Independent Director)

     Mr. N. C. Jain has filed a complaint (Complaint Case No. 352 of 2000) before the Additional Chief
     Judicial Magistrate- IV, Agra, against Mr. Pradeep Kumar Jain and the directors of Pearl Developers
     Private Limited and Bhargava and Associates Private Limited (the developer), claiming that he
     should be returned Rs. 1,00,000 which he paid to book an apartment in the proposed Kaveri Kunj
     Complex on Deolokhanpur Road, New Delhi because of alleged title disputes and problems in
     obtaining sanctions with respect to land. On an application made by Mr. S.C. Bhargava, a director of
     Bhargava and Associates Private Limited, the High Court of Allahabad has through order dated
     February 23, 2005 stayed Complaint Case No. 352 against the said applicant only. The matter is
     currently pending and the next date of hearing is November 5, 2007. Earlier, the complainant had
     filed a complaint with the Criminal Investigation Department, which was adjudicated as being of
     civil nature.




                                                    134
4.   I.T Cases

a.   Against Mr. Pradeep Kumar Jain (Independent Director)
     In the assessment year 2005-2006, Mr. Pradeep Kumar Jain had filed an appeal before CIT (Appeal) –
     III, New Delhi. IN the order, CIT (Appeal) had granted relief. The Assistant Commissioner of Income
     Tax, Central Circle – 18 has preferred an appeal at ITAT against the Order of CIT-Appeal-III, New
     Delhi. A copy of the Form 36 has been received from the ITAT.

     Mr. Pradeep Kumar Jain has filed Income Tax Returns upto Assessment Year 2007-2008.
     For the assessment year 2006-2007, only limitation under Section 143(1) of the ncome-tax Act, 1961
     has been received. Assessment proceedings are pending.

B. Cases filed by the Promoters/Directors

1.   Criminal Cases

a.   State v. Mahavir Agarwal & others

      Case No. 5262/2006 in the court of Hon’ble C.J.M, Noida, Gautam Budh Nagar, U.P.

     On 27.12.2005, Hanuman Trading Company (HTC) requested the Company to send Priya gold
     biscuits, for which the latter was assured Rs 5,00,000/-. Products worth Rs 6, 78,755.19 were sent to
     HTC on 21.12.2005 through Upper Trading Transport Company. The Company was confident that
     the amount of Rs. 5,00,000/- has been deposited by the HTC in its account. But, when Mr. Arun
     Sharma, Sales Manger, of the Company visited Gorakhpur and enquired about the aforesaid deposit
     from HDFC, Gorakhpur, he found that the aforesaid amount was never released by the HTC.

     HTC disputed the delivery of goods in question after which the Company requested them to come
     to Noida and verify the details of delivery. On coming to Noida, HTC denied/disputed delivery and
     threatened the Company for dire consequences and also refused to make any payment. The
     Company in turn lodged an F.I.R. to prevent any physical harm and embezzlement.

     Case no 5262/2006 U/S 420,504,506 is pending before Hon’ble C.J.M Court, Noida Gautam Budh
     Nagar. The accused had taken a stay order from Hon’ble High Court, Allahabad in case no 5347/06.
     The Company filed counter affidavit and Hon’ble Allahabad High Court accordingly vacated stay
     order in Case no 5347/2006.

III LITIGATION INVOLVING PROMOTER/GROUP COMPANIES

There are no outstanding litigation, disputes, non-payment of statutory dues, overdues to banks /
financial institutions, defaults against banks / financial institutions, defaults in dues towards instrument
holders like debenture holders, fixed deposits, and arrears on cumulative preference shares issued,
defaults in creation of full security as per terms of issue, other liabilities, proceedings initiated for
economic / civil / any other offences (including past cases where penalties may or may not have been
awarded and irrespective of whether they are specified under paragraph (i) of Part I of Schedule XIII of
the Companies Act, 1956) against any promoter group companies.




                                                    135
B) REGULATORY AND OTHER APPROVALS

On the basis of the indicative list of approvals below, the Company is permitted to carry on business
activities and no further major approvals from any Government authorities or regulatory authority or
any other entity are required by the Company to undertake the Issue or continue these business activities.
It must be understood that, in granting these licenses, Government of India and/ or Reserve Bank of
India does not take any responsibility for Company’s financial soundness or for the correctness of any of
the statements made or opinion expressed in this behalf.

The Company has opted necessary approvals and registrations from various authorities in relation to its
business activities; which include:

SURYA FOOD AND AGRO LIMITED

General Approvals

Sr.      Description of Permit/ License         Issuing Authority              Reference No.
No.
       Certificate of Incorporation bearing   Registrar           of     U15201UP1992PLC014919
       company identification number          Companies,       Uttar
                                              Pradesh & Uttranchal,
                                              Kanpur.
       Fresh certificate of Incorporation     Registrar           of
       pursuant to change in name of the      Companies,       Uttar
       Company from Surya Food & Agro         Pradesh, Kanpur.
       Private Limited to Surya Food &
       Agro Limited.
       PAN No. under I.T. Act                 Income Tax Dept.               AAACS3026P
       TAN No. under I.T. Act                 Income Tax Dept.               DELS09444B
       Registration of Weights and            Standards of Weights        UP/MRT/PCR/008/05
       Measures approval certificate          and          Measures
                                              (Packaged
                                              Commodities)     Rules,
                                              1977
       Certificate of Registration under      Deputy Commissioner,         ND- 001082 & 0054069
       U.P Trade Tax                          Trade tax, Gautam
                                              Budh    Nagar-120110.
                                              U.P.
       Employee State Insurance Act, 1948                                21-14271-09 & 21-14043-09
       Employees Provident Fund Act,          Employees’ Provident            U.P./MT/21350
       1952                                   Fund                and
                                              Miscellaneous
                                              Provisions Act, 1952
       Registration under Central Excise      Deputy Commissioner          AAACS3026PXM001,
       Act                                    of   Central     Excise,     AAACS3026PXM002,
                                              Noida                       AAACS3026PXM003 &
                                                                           AAACS3026PXM004
       Registration under Service tax         Deputy Commissioner         AAACS3026PST002 and
                                              of Customs & Central        AAACS3026PST003 and
                                              Excise, Division – IV,       AAACS3026PST001
                                              Noida
       Certificate   of   Secretariat   for   Government of India ,


                                                   136
       Industrial Assistance                   Ministry of industry
       Central Sales tax                       Central Sales Tax Act,      5052123 and 24660902202
                                               1956
       Importer-Exporter  Code    (The         Office of Asst. Director    IEC No. 0597063460
       company has obtained IEC for all        General of Foreign
       the branches)                           Trade , Ministry of
                                               Commerce,
                                               Government of India
       Certificate of ISO 9001:2000 for        DET            NORSKE       04310-2006-AQ-Bom-RvA
       quality management system               VERITAS Certificate
       Certificate of requirement for a        DET            NORSKE       1362-2007-AFSMS-IND-
       HACCP based Food Safety System,         VERITAS Certificate         RvA
       September 2002
       Registration under Sales tax                                                 5052123


SURYA FOOD AND AGRO LIMITED

UNIT I : Plot No. 14, Noida-Dadri Road, Surajpur, Greater Noida, U.P. 201305

Approvals Obtained

Sr.       Description of Permit/ License          Issuing Authority           Reference No.          Date of
No.                                                                                                  Expiry
 1.    Secretariat for Industrial Assistance     Government of India        1905/SIA/IMO/99             -
       Entrepreneurial Unit                      , Ministry of industry
 2.    License for manufacture & sale of         Uttar          Pradesh         GBN- 509          31/03/2008
       Biscuits                                  Prevention of Food
                                                 and Adulteration Act,
                                                 1954 & Uttar Pradesh
                                                 Food               and
                                                 Adulteration
                                                 Regulation, 1976
 3.    Factory License                           Deputy Director of             GZB-3326          31/12/2007
                                                 Factories, Noida –
                                                 U.P
 4.    License for prevention of       food      Government of Uttar                              31/03/2008
       adulteration                              Pradesh
 5.    Water Pollution Certificate               U.P Pollution Control         G-12/246/06        31/12/2008
                                                 Board,          E-12/1,
                                                 Sector-1,        Noida
                                                 Janpad-Gautam
                                                 Budha Nagar.
 6.    Air Pollution Certificate                 U.P Pollution Control         G-12/246/06        31/12/2008
                                                 Board,          E-12/1,
                                                 Sector-1,        Noida
                                                 Janpad-Gautam
                                                 Budha Nagar.




                                                    137
UNIT II: Plot No. 1A, Udyog Vihar, Greater Noida, U.P. 201305

Approvals Obtained

Sr.       Description of Permit/ License        Issuing Authority           Reference       Date of
No.                                                                                         Expiry
 1.    Secretariat for Industrial Assistance   Government of India       1905/SIA/IMO/99       -
       Entrepreneurial Unit                    , Ministry of industry
 2.    License for manufacture & sale of       Uttar          Pradesh       GBN- 510       31/03/2008
       Biscuits                                Prevention of Food           GBN- 511
                                               and Adulteration Act,
                                               1954 & Uttar Pradesh
                                               Food               and
                                               Adulteration
                                               Regulation, 1976
 3.    Factory License                         Deputy Director of                              -
                                               Factories, Noida –
                                               U.P
 4.    Air Pollution Certificate               U.P Pollution Control       G-12/233/07     31/12/2008
                                               Board,          E-12/1,
                                               Sector-1,        Noida
                                               Janpad-Gautam
                                               Budha Nagar.
 5.    Water Pollution Certificate             U.P Pollution Control       G-12/233/07     31/12/2008
                                               Board,          E-12/1,
                                               Sector-1,        Noida
                                               Janpad-Gautam
                                               Budha Nagar.
 6.    Approval for air pollution              U.P Pollution Control      233/C/S-275/07   31/12/2008
                                               Board,          E-12/1,
                                               Sector-1,        Noida
                                               Janpad-Gautam
                                               Budha Nagar.




                                                  138
UNIT II- C-4, Sarojini Nagar, Industrial Area, Lucknow, U.P.

Approvals Obtained

Sr.       Description of Permit/ License          Issuing Authority         Reference No.       Date of
No.                                                                                             Expiry
 1.    The company has opted for                Deputy Director of            LKO-992         31/12/2007
       Registration and License to Work a       Factories, Lucknow –
       Factory                                  U.P
 2.    Registration under Service tax           Superintendent (ST),      748/STR/Transpor    Till the time
                                                Central         Excise      t/LKO-1/2005            of
                                                Division      –     1,                        continuation
                                                Lucknow.                                       of business
 3.    Licenses for manufacture & sale of       Uttar         Pradesh         PFA-2/803       31/03/2008
       Biscuits                                 Prevention of Food
                                                and Adulteration Act,
                                                1954 & Uttar Pradesh
                                                Food              and
                                                Adulteration
                                                Regulation, 1976
 4.    Water Pollution Certificate              U.P Pollution Control       243/5522/2004           -
                                                Board,     C-952/953,
                                                Sector- B, Mahanagar,
                                                Lucknow
 5.    Air Pollution Certificate                U.P Pollution Control       244/5522/2004           -
                                                Board,     C-952/953,
                                                Sector- B, Mahanagar,
                                                Lucknow

UNIT III- Plot No. 4311, Road No. 4, G.I.D.C., Industrial Estate, Sachin, District- Surat

Approvals Obtained

Sr.       Description of Permit/ License            Reference No.            Date of
No.                                                                          Expiry
 1.    Registration & License to work as a       CIF/A/CPT/GUJ-            31/03/2008
       Factory.                                        769103
 2.    Registration under Gujarat trade tax         24160902202                -

SUBSIDIARY COMPANIES

SURYA FRESH FOODS LIMITED

Sr.       Description of Permit/ License         Issuing Authority         Reference No.         Date of
No.                                                                                              Expiry
 1.    License under Fruit Products Order-                                   FPO- 14056             -
       1955
 2.    Secretariat for Industrial Assistance    Government       of      4968/SIA/IMO/2004          -
       Entrepreneurial Unit                     India , Ministry of
                                                industry
 3.    Importer-Exporter Code                                            IEC No. 0504068199   N.A. unless
                                                                                              change in the


                                                   139
                                                                                         Name/Addr
                                                                                         ess or
                                                                                         constitution
                                                                                         of the IEC
                                                                                         Holder
4.    PAN No. under I.T. Act                   Income Tax Dept.          AAICS4670F       Till the time
                                                                                                of
                                                                                          continuation
                                                                                           of business
5.    TAN No. under I.T. Act                   Income Tax Dept.          DELS25206G              -
6.    Registration under Uttar Pradesh         registration under        GN- 0026902             -
      Trade Tax                                section 8 of Uttar
                                               Pradesh Trade Tax
                                               Act, 1948
7.    Employee State Insurance Act, 1948                                  21-14365-03          -
8.    Employees Provident Fund Act, 1952                                  U.P./ 36832          -
9.    Registration & License to work as a      Deputy Director of         NDA/3309        31/12/2007
      Factory.                                 Factories.    Noida,
                                               U.P.
10.   Registration  for    Weights      and    Registration under      UP/PCR/MRT/153/         -
      Measures approval certificate            Rule 35 of the                07
                                               Standard           of
                                               Weights          and
                                               Measures
                                               (Packaged
                                               Commodities)
                                               Rules, 1977
11.   Registration under Central Excise Act,   Assistant               AAICS4670FXM001   Till the time
      1944                                     Commissioner,                                   of
                                               Central       Excise,                     continuation
                                               Division-IV, Noida                         of business
12.   Registration Under Service tax           Deputy                  AAICS4670FST001   Till the time
                                               Commissioner of                                 of
                                               Customs & Central                         continuation
                                               Excise, Division –                         of business
                                               IV, Noida
13.   Registration under Sales tax             Registration under         GN- 5073688          -
                                               section    7(2)    of
                                               Central Sales Tax
                                               Act 1956,
14.   VAT Registration                         Office    of    Asst.      05007390455    shall remain
                                               Director     General                       in force for
                                               Foreign Trade ,                            ever unless
                                               Ministry           of                     renewed or
                                               Commerce,                                   cancelled
                                               Government         of
                                               India
15.   Air Pollution Certificate                U.P.       Pollution      G-12/267/06      31/12/2008
                                               Control Board, E-
                                               12/ 1, Sec-1, Noida
16.   Water Pollution Certificate              U.P.       Pollution      G-12/264/06      31/12/2008



                                                  140
                                               Control Board, E-
                                               12/ 1, Sec-1, Noida
17.   License for manufacture & sale of        license under the           GBN- 506        31/03/2008
      Juice                                    Uttar       Pradesh         GBN- 507
                                               Prevention of Food
                                               and Adulteration
                                               Act, 1954 & Uttar
                                               Pradesh Food and
                                               Adulteration
                                               Regulation, 1976
18.   License for manufacture & sale of        license under the           GBN- 508        31/03/2008
      Biscuits                                 Uttar       Pradesh
                                               Prevention of Food
                                               and Adulteration
                                               Act, 1954 & Uttar
                                               Pradesh Food and
                                               Adulteration
                                               Regulation, 1976

SURYA PROCESSED FOOD PRIVATE LIMITED

Sr.       Description of Permit/ License       Issuing Authority         Reference No.        Date
No.
 1.   PAN No. under I.T. Act                    Income Tax Dept.         AAKCS7174G             -
 2.   TAN No. under I.T. Act                    Income Tax Dept.         DELS32602D             -
 3.   Secretariat for Industrial Assistance    Government       of    569/SIA/IMO/2007     21/02/2007
      Entrepreneurial Unit                     India , Ministry of
                                               industry

INTELLECTUAL PROPERTY RIGHTS FOR SURYA FOOD & AGRO IMITED

A. TRADEMARKS ACT, 1999 REGISTRATION

The Company has obtained Trade Mark registration under Section 23(2), Rule 62 (I) of Trade Marks Act,
1999 for the following marks, the details of which are listed below

Sr.                Description                 Trade Mark No.          Date
No.
 1.   “PRIYAGOLD”                                   947620           14/08/2000
 2.   “PRIYAGOLD”                                   947621           14/08/2000
 3.   “PRIYAGOLD”,           Pharmaceutical,        947622           14/08/2000
      Veterinary and Sanitary Substances,
      Infants and invalid foods, plasters.
 4.   “Jeera Top”, Biscuits & Namkeens             925928            19/05/2000
 5.   “Glucose-V”, Biscuits & Namkeens             925927            19/05/2000
 6.   “CHEEZ-BIT”                                  1058348           12/11/2001




                                                  141
B. REGISTRATION APPLIED UNDER TRADEMARKS ACT, 1999

Sr.                 Description                  Trade Mark No.            Date
No.
 1.    “PRIYAGOLD”                                947621, 947623,        06/02/2001
                                                  947624, 947625,
                                                  947626, 947611,
                                                  947612, 947613,
                                                  947614, 947615,
                                                  947616, 947617,
                                                 947618 & 947619
 2.    “HAK SE MAANGO” (In Hindi)                     972240             23/02/2001
       PRIYAGOLD BISCUITS
 3.    “HAK SE MANGO” (In Hindi)                     972243              23/02/2001
       PRIYAGOLD BISCUITS
  4.   “HAK SE MAANGO”                               972244              23/02/2001
  5.   “HAK SE MAANGO”                               972242              23/02/2001
  6.   ”CHEESE CRACKER”                              950491              28/08/2000
  7.   ”CLASSIC CREAM”                              01161955             27/12/2000
  8.   “NICE DAY”                                    972241              22/11/2000
  9.   ‘NICE DAY’                                    925141              06/02/2001
 10.   ‘BUTTER BITE’                                 925142              16/05/2000
 11.   “BUTTERBITE”                                  700259              13/02/2001
 12.   “BUTTERLITE”                                 01037549             17/08/2001
 13.   ‘MARIE LITE’                                  925143              16/05/2000
 14.   “KESAR BITE”                                 01058347             12/11/2001
 15.   “KIDS CREAM”                                 01062387             23/11/2001

C. COPYRIGHT OF DESIGNS UNDER DESIGN ACT, 1911 AND THE DESIGN RULES, 1933

The Company has obtained Certificate of Registration of Design related to the following:-

Sr.          Design No.                Class                 Date                     Remarks
No.
 1.     182553, 182554, 18255,        12 (Old)           June 05, 2000    “Biscuit” -  Registration of
               182556                                                     Design under extension of
                                                                          Copyright Section 11(2)
 2.            182555                 12 (Old)           June 05, 2000    “Biscuit” -  Registration of
                                                                          Design under extension of
                                                                          Copyright Section 11(2)
 3.            182553                 12 (Old)           June 05, 2000    “Biscuit” -  Registration of
                                                                          Design under extension of
                                                                          Copyright Section 11(2)
 4.            182554                 12 (Old)           June 05, 2000    “Biscuit” -  Registration of
                                                                          Design under extension of
                                                                          Copyright Section 11(2)
 5.            179909                    03              July 14, 1999    “Biscuit” -  Registration of
                                                                          Design under extension of
                                                                          Copyright Section 11(2)




                                                   142
D. APPLICATION MADE FOR REGISTRATION OF COPYRIGHT FOR USE UNDER SECTION
   45(1) OF THE COPYRIGHT ACT, 1957

The Company has applied for registration of the following copyright:-
Sr.         Application Made For            Application No.             Class       Date of
No.                                                                                Certificate
 1.    Copyright Registration of the             700453                  30       July 19, 2001
       label “PRIYA GOLD”
 2.    Copyright Registration in respect         925141                  30       July 19, 2001
       of the label “NICE DAY”
 3.    Copyright Registration of the             700460                  30       July 19, 2001
       Label “SNACKS”
 4.    Copyright Registration of the             925142                  30       July 19, 2001
       Label “BUTTER BITE”
 5.    Copyright Registration of the             700456                  30       July 19, 2001
       label “ELAICHI CREAM”
 6.    Copyright Registration of the             700466                  30       July 19, 2001
       label “CHOCOLATE CREAM”
 7.    Copyright Registration of the             700548                  30       July 19, 2001
       label “CASHEW”
 8.    Copyright Registration of the             827479                  30       July 19, 2001
       label “FRUIT BITE”
 9.    Copyright Registration of the             700454                  30       July 19, 2001
       label “CRACK ‘N’CHEERS”
 10.   Copyright Registration of the             1058347                 30       September 24,
       label “PRIYAGOLD KESAR                                                         2002
       BITE”
 11.   Copyright Registration of the             1062387                 30       September 24,
       label     “PRIYAGOLD       KIDS                                                2002
       CREAM”
 12.   Copyright Registration of the             1058348                 30       September 24,
       label “PRIYAGOLD CHEEZ-                                                        2002
       BIT”
 13.   Copyright Registration of Label           866746                  30       July 19, 2001
       “MAGIC GOLD”
 14.   Copyright Registration of Label           925928                  30       July 19, 2001
       “JEERA TOP”
 15.   Copyright Registration of Label           925143          30; Biscuits &   July 19, 2001
       ‘MARIE LITE’                                               Namkeens
 16.   Copyright Registration of the             700259                30         July 19, 2001
       Label “BUTTER BITE”




                                                  143
                  VII. OTHER REGULATORY AND STATUTORY DISCLOSURES

A) AUTHORITY FOR THE PRESENT ISSUE

    The shareholders of Surya Food and Agro Limited have authorized the Issue by a special resolution
    adopted pursuant to Section 81 (1A) of the Companies Act, passed at the Annual General Meeting
    held on 18/09/2007.

B) PROHIBITION BY SEBI

    The Company, its Promoters, its Directors or any of the Company’s associates or group companies
    and companies with which the Directors of the Company are associated as Directors or Promoters, or
    Directors or Promoters in control of, of the promoting Company, are currently not prohibited from
    accessing or operating in the capital market under any order or direction passed by SEBI.

    The Promoters, their relatives (as per Act), the Company, group companies, associate companies are
    not detained as willful defaulters by RBI / Government authorities.

C) Eligibility for the Issue

    Surya Food & Agro Limited is an unlisted company; and is eligible for the Issue as per Clause 2.2.1 of
    the SEBI Guidelines as explained under:

    •   The Company had net tangible assets of at least Rs. 3 crores in each of the preceding three full
        years (of 12 months each) of which not more than 50% is held in monetary assets.;
    •   The Company had a track record of distributable profits in terms of Section 205 of the Companies
        Act for at least three out of the immediately preceding five years;
    •   The Company had a net worth of at least Rs. 1 crore in each of the preceding three full years of 12
        months each; and
    •   The aggregate of the proposed Issue and all previous issues made in the same financial years in
        terms of size does not exceed five times the pre-issue net worth of the Company as per the
        audited balance sheet as of March 31, 2007.

    The following table shows the net tangible assets, distributable profits and net worth for the past
    three fiscal years:
                                                                                          (Rs. In Lacs)
                                                    For the Financial Year Ended March 31
                                                         2007                2006               2005
     Net Profit (Distributable) (1)                    283.67              130.16            248.10
     Net Worth (as restated)(2)                       6931.25             6667.86           6535.86
     Net Tangible Assets(2)                           7614.83             7298.35           7209.78
     Monetary Assets(3)                                 78.54              174.39              72.61
     % of Monetary Assets to Net Tangible                 1.03                2.39              1.01
     Assets




                                                   144
   Note:

   1.   Distributable profits have been defined in terms of section 205 of the Companies Act.
   2.   Net tangible assets is defined as the sum of fixed assets (including capital work in progress),
        currents assets (excluding deferred tax assets), investments and less current liabilities (excluding
        deferred tax liabilities) and long term liability.
   3.   Net Monetary assets comprise of cash in hand, cash at bank, quoted investments, fixed deposits
        and interest accrued on fixed deposit, if any.

   Further in terms of clause 2.2.2 A of the DIP Guidelines, the prospective allottees shall be more than
   one thousand.

   We satisfy all the eligibility criteria’s, laid down in clause 2.2.1 of SEBI (DIP) Guidelines. However,
   we are doing a “voluntary book-building issue” wherein we proposes to allot upto 50% of the Issue
   to QIBs and under-subscription, if any, in the QIB portion will be added back to the Net Issue to
   public.

   Our company is considering the pre- IPO placement of certain equity shares with certain investors,
   prior to the completion of the issue. In such a case the issue size offered to the public would be
   reduced to the extent of such pre- IPO placement subject to such minimum issue size of the post issue
   capital being offered to the public as may be permited. In such an event we will ensure that we
   comply with Rule 19(2)(b) of SC(R) Rules, 1957.

   Our Promoters, their relatives (as per the Companies Act), the Company, group companies and
   associate companies are not detained as willful defaulters by the RBI/Government of India
   authorities and there are no violations of securities laws committed by them in the past or pending
   against them other than as disclosed in this DRHP.

D) DISCLAIMER CLAUSE (SEBI)

   AS REQUIRED, A COPY OF THE DRAFT RED HERRING PROSPECTUS HAS BEEN
   SUBMITTED TO SEBI. IT IS TO BE DISTINCTLY UNDERSTOOD THAT SUBMISSION OF
   THE DRAFT RED HERRING PROSPECTUS TO SEBI SHOULD NOT, IN ANY WAY, BE
   DEEMED OR CONSTRUED THAT THE SAME            HAS   BEEN     CLEARED  OR
   APPROVED BY SEBI. SEBI DOES NOT TAKE ANY RESPONSIBILITY EITHER FOR
   THE FINANCIAL SOUNDNESS OF ANY SCHEME OR THE PROJECT FOR WHICH THE
   ISSUE IS PROPOSED TO BE MADE OR FOR THE CORRECTNESS OF THE
   STATEMENTS MADE OR OPINIONS EXPRESSED IN THE DRAFT RED HERRING
   PROSPECTUS. THE BOOK RUNNING LEAD MANAGER, KEYNOTE CORPORATE
   SERVICES LIMITED, HAVE CERTIFIED THAT THE DISCLOSURES MADE IN THE DRAFT
   RED HERRING PROSPECTUS ARE GENERALLY ADEQUATE AND ARE IN CONFORMITY
   WITH SEBI (DISCLOSURES AND INVESTOR PROTECTION) GUIDELINES, 2000 AS FOR
   THE TIME BEING IN FORCE. THIS REQUIREMENT IS TO FACILITATE INVESTORS TO
   TAKE AN INFORMED DECISION FOR MAKING AN INVESTMENT IN THE
   PROPOSED ISSUE.

   IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT WHILE THE COMPANY IS
   PRIMARILY RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE
   OF ALL RELEVANT INFORMATION IN THE DRAFT RED HERRING PROSPECTUS,
   THE BOOK RUNNING LEAD MANAGER ARE EXPECTED TO EXERCISE DUE DILIGENCE
   TO ENSURE THAT THE COMPANY DISCHARGES ITS RESPONSIBILITY ADEQUATELY
   IN THIS BEHALF AND TOWARDS THIS PURPOSE, THE BOOK RUNNING LEAD



                                                    145
MANAGER, KEYNOTE CORPORATE SERVICES LIMITED, HAVE FURNISHED TO SEBI, A
DUE DILIGENCE CERTIFICATE DATED 23/10/2007 IN ACCORDANCE WITH THE SEBI
(MERCHANT BANKERS) REGULATIONS, 1992 WHICH READS AS FOLLOWS:

  (I) “WE HAVE EXAMINED VARIOUS DOCUMENTS INCLUDING THOSE RELATING TO
      LITIGATION LIKE COMMERCIAL DISPUTES, PATENT DISPUTES, DISPUTES WITH
      COLLABORATORS ETC. AND OTHER MATERIALS IN CONNECTION WITH THE
      FINALISATION OF THE DRAFT RED HERRING PROSPECTUS PERTAINING TO
      THE SAID ISSUE.

  (II) ON THE BASIS OF SUCH EXAMINATION AND THE DISCUSSIONS WITH THE
       COMPANY, ITS DIRECTORS AND OTHER OFFICERS, OTHER AGENCIES,
       INDEPENDENT   VERIFICATION   OF THE STATEMENTS CONCERNING THE
       OBJECTS OF THE ISSUE, PROJECTED PROFITABILITY, PRICE JUSTIFICATION
       AND THE CONTENTS OF THE DOCUMENTS MENTIONED IN THE ANNEXURE
       AND OTHER PAPERS FURNISHED BY THE COMPANY, WE CONFIRM THAT:

       •    THE DRAFT RED HERRING PROSPECTUS FORWARDED TO SEBI IS IN
            CONFORMITY WITH THE DOCUMENTS, MATERIALS AND PAPERS RELEVANT
            TO THE ISSUE;

       •    ALL THE LEGAL REQUIREMENTS CONNECTED WITH THE SAID ISSUE AS
            ALSO THE GUIDELINES, INSTRUCTIONS, ETC. ISSUED BY SEBI, THE
            GOVERNMENT AND ANY OTHER COMPETENT AUTHORITY IN THIS BEHALF
            HAVE BEEN DULY COMPLIED WITH;

       •    THE DISCLOSURES MADE IN THE DRAFT RED HERRING PROSPECTUS ARE
            TRUE, FAIR AND ADEQUATE TO ENABLE THE INVESTORS TO MAKE A WELL-
            INFORMED DECISION AS TO THE INVESTMENT IN THE PROPOSED ISSUE;

 (III) BESIDES OURSELVES, ALL THE INTERMEDIARIES NAMED IN THE DRAFT
       RED HERRING PROSPECTUS ARE REGISTERED WITH SEBI AND THAT TILL
       DATE SUCH REGISTRATIONS ARE VALID;

 (IV) WHEN UNDERWRITTEN, WE SHALL SATISFY OURSELVES ABOUT THE
      WORTH   OF    THE UNDERWRITERS TO FULFIL THEIR UNDERWRITING
      COMMITMENTS. AND

 (V)       WE CERTIFY THAT WRITTEN CONSENT FROM SHAREHOLDERS HAS BEEN
           OBTAINED FOR INCLUSION OF THEIR SECURITIES AS PART OF PROMOTER’S
           CONTRIBUTION SUBJECT TO LOCK-IN AND THE SECURITIES PROPOSED TO
           FORM PART OF THE PROMOTER’S CONTRIBUTION SUBJECT TO LOCK-IN,
           WILL NOT BE DISPOSED/ SOLD/ TRANSFERRED BY THE PROMOTERS DURING
           THE PERIOD STARTING FROM THE DATE OF FILING OF THE DRAFT RED
           HERRING PROSPECTUS WITH THE SEBI TILL THE DATE OF COMMENCEMENT OF
           LOCK-IN PERIOD AS STATED IN THE DRAFT RED HERRING PROSPECTUS.”

ALL LEGAL REQUIREMENTS PERTAINING TO THE ISSUE WILL BE COMPLIED WITH
AT THE TIME OF FILING OF RED HERRING PROSPECTUS WITH THE ROC IN TERMS OF
SECTION 60B OF THE COMPANIES ACT. ALL LEGAL REQUIREMENTS PERTAINING TO
THE ISSUE WILL BE COMPLIED WITH AT THE TIME OF REGISTRATION OF THE
PROSPECTUS WITH THE ROC IN TERMS OF SECTION 56, SECTION 60 AND SECTION 60B
OF THE COMPANIES ACT.



                                      146
  THE FILING OF THE DRAFT RED HERRING PROSPECTUS DOES NOT, HOWEVER,
  ABSOLVE THE COMPANY FROM ANY LIABILITIES UNDER SECTION 63 AND SECTION 68
  OF THE COMPANIES ACT OR FROM THE REQUIREMENTS OF OBTAINING SUCH
  STATUTORY AND OTHER CLEARANCES AS MAY BE REQUIRED FOR THE PURPOSE
  OF THE PROPOSED ISSUE. SEBI FURTHER RESERVES THE RIGHT TO TAKE UP AT
  ANY POINT OF TIME, WITH THE BOOK RUNNING LEAD MANAGERS, ANY
  IRREGULARITIES OR LAPSES IN THE RED HERRING PROSPECTUS.

E) DISCLAIMER STATEMENT FROM THE COMPANY AND THE BRLM

  The Company, the Directors, and the BRLM accept no responsibility for statements made otherwise
  than in this DRHP or in the advertisements or any other material issued by or at instance of the above
  mentioned entities and anyone depending on any other source of information, including our
  website, www.priyagold.com, would be doing so at his or her own risk.

  The BRLM accept no responsibility, save to the limited extent as provided in the
  Memorandum of Understanding entered into among the BRLM and us dated 05/09/2007 and the
  Underwriting Agreement to be entered into among the Underwriters and us.

  All information shall be made available by us and BRLM to the public and investors at large and no
  selective or additional information would be available for a section of the investors in any manner
  whatsoever including at road show presentations, in research or sales reports or at bidding centres
  etc.

  Neither we nor the Syndicate is liable to the Bidders for any failure in downloading the Bids due to
  faults in any software/hardware system or otherwise.

F) DISCLAIMER WITH RESPECT TO JURISDICTION

  This Issue is being made in India to persons resident in India {including Indian nationals resident in
  India who are majors, HUFs, companies, corporate bodies and societies registered under the
  applicable laws in India and authorised to invest in shares, Indian Mutual Funds registered with
  SEBI, Indian financial institutions, commercial banks, regional rural banks, co-operative banks
  (subject to RBI permission), or trusts under the applicable trust law and who are authorised under
  their constitution to hold and invest in shares, permitted insurance companies and pension funds}.
  This Draft Prospectus does not, however, constitute an invitation to subscribe to Equity Shares
  offered hereby in any other jurisdiction to any person to whom it is unlawful to make an offer or
  invitation in such jurisdiction. Any person into whose possession this Draft Prospectus comes is
  required to inform him or herself about and to observe, any such restrictions. Any dispute arising out
  of this Issue will be subject to the jurisdiction of appropriate court(s) in Noida, uttar Pradesh only.

  No action has been or will be taken to permit a public offering in any jurisdiction where action would
  be required for that purpose, except that this Draft Prospectus has been filed with SEBI for
  observations. Accordingly, the Equity Shares, represented thereby may not be offered or sold,
  directly or indirectly, and this Draft Red Herring Prospectus may not be distributed, in any
  jurisdiction, except in accordance with the legal requirements applicable in such jurisdiction. Neither
  the delivery of this Draft Prospectus nor any sale hereunder shall, under any circumstances, create
  any implication that there has been no change in our affairs from the date hereof or that the
  information contained herein is correct as of any time subsequent to this date.




                                                 147
G) DISCLAIMER CLAUSE OF THE STOCK EXCHANGES

  Disclaimer Clause of the NSE

  As required, a copy of this Draft Red Herring Prospectus has been submitted to National Stock
  Exchange of India Limited. NSE has given vide its letter Ref. No. [●] dated [●] permission to the
  Issuer to use the Exchange’s name in this Draft Red Herring Prospectus as one of the stock
  exchanges on which this Issuer’s securities are proposed to be listed subject to the Issuer fulfilling the
  various criteria for listing including the one related to paid up capital and market capitalisation (i.e.
  the paid up capital shall not be less than Rs. 10 crores and market capitalisation shall not be less
  than Rs. 25 crores at the time of listing). The Exchange has scrutinised this Draft Red Herring
  Prospectus for its limited internal purpose of deciding on the matter of granting the aforesaid
  permission to this Issuer. It is to be distinctly understood that the aforesaid permission given by NSE
  should not in any way be deemed or construed that the Draft Red Herring Prospectus has been
  cleared or approved by NSE; nor does it in any manner warrant, certify or endorse the
  correctness or completeness of any of the contents of this Draft Red Herring Prospectus, nor does it
  warrant that this Issuer’s securities will be listed or will continue to be listed on the Exchange; nor
  does it take any responsibility for the financial or other soundness of this Issuer, its promoters, its
  management or any scheme or project of this Issuer.

  Every person who desires to apply for or otherwise acquire any securities of this Issuer may do so
  pursuant to independent inquiry, investigation and analysis and shall not have any claim against the
  Exchange whatsoever by reason of any loss which may be suffered by such person consequent
  to or in connection with such subscription/acquisition whether by reason of anything stated or
  omitted to be stated herein or any other reason whatsoever.

  Disclaimer Clause of Bombay Stock Exchange Limited (BSE):

  “Bombay Stock Exchange Limited (“the Exchange”) has given vide its letter no. [●] dated [●]
  permission to the Company to use the Exchange’s name in this Prospectus as one of the stock
  exchanges on which this Company’s securities are proposed to be listed. The Exchange has
  scrutinized this Prospectus for its limited internal purpose of deciding on the matter of granting the
  aforesaid permission to this Company. The Exchange does not in any manner:

  i.   Warrant, certify or endorse the correctness or completeness of any of the contents of this
       Prospectus; or
  ii. Warrant that this Company’s securities will be listed or will continue to be listed on the
       Exchange; or
  iii. Take any responsibility for the financial or other soundness of this Company, its promoters, its
       management or any scheme or project of this Company;

  and it should not for any reason be deemed or construed that this Prospectus has been cleared or
  approved by the Exchange. Every person who desires to apply for or otherwise acquires any
  securities of this Company may do so pursuant to independent inquiry, investigation and analysis
  and shall not have any claim against the Exchange whatsoever by reason of any loss which may be
  suffered by such person consequent to or in connection with such subscription/acquisition whether
  by reason of anything stated or omitted to be stated herein or for any other reason whatsoever”.

H) FILING

  A copy of this DRHP has been filed with SEBI at Mumbai.




                                                   148
     A copy of the Red Herring Prospectus, along with the documents required to be filed under Section
     60B of the Companies Act, will be delivered for registration to the ROC and a copy of the Prospectus
     required to be filed under Section 60 of the Companies Act would be delivered for registration with
     the ROC, U.P. & Uttarakhand, Kanpur.

I)   LISTING

     Applications will be made to NSE and BSE for permission to deal in and for an official quotation of
     the Equity Shares of the Company. NSE shall be the Designated Stock Exchange with which the basis
     of allocation will be finalised.

     If the permission to deal in and for an official quotation of the Equity Shares is not granted by any of
     the Stock Exchanges mentioned above, the Company shall forthwith repay, without interest, all
     monies received from the applicants in pursuance of this DRHP. If such money is not repaid within
     eight days after the Company becomes liable to repay it from the date of refusal or within 70 days
     from the date of Bid/Issue Closing Date, whichever is earlier, then the Company, and every Director
     of the Company who is an officer in default shall, on and from expiry of eight days, be liable to repay
     the money, with interest at the rate of 15% per annum on application money, as prescribed under
     Section 73 of the Companies Act.

     The Company shall ensure that all steps for the completion of the necessary formalities for
     listing and commencement of trading at both the Stock Exchanges mentioned above are taken within
     seven working days of finalisation of the basis of Allotment for the Issue.

J)   IMPERSONATION

     Attention of the Applicants is specifically drawn to the provisions of sub-section (1) of Section 68 A of
     the Companies Act, which is reproduced below:

     "Any person who:

         a) makes in a fictitious name, an application to a company for acquiring or subscribing
            for, any shares therein, Or
         b) otherwise induces a company to allot, or register any transfer of shares, therein to
            him, or any other person in a fictitious name,

     shall be punishable with imprisonment for a term which may extend to five years."

K) CONSENTS

     Consents in writing of the Directors, the Company Secretary and Compliance Officer, the Auditors,
     the Legal Advisor, Bankers to the Company, BRLM and the Registrar to the Issue to act in their
     respective capacities, have been obtained and will be filed along with a copy of the RHP with the
     ROC as required under Sections 60 and 60B of the Companies Act and such consents have not been
     withdrawn up to the time of delivery of the Prospectus for registration with the ROC.

     Vinay Aggarwal & Associates Chartered Accountants, Auditors of the Company have also given
     their consent to the inclusion of their report as appearing hereinafter in the form and context in which
     appears in this DRHP and also of the tax benefits accruing to the Company and to the members of the
     Company and such consent and report have not been withdrawn up to the time of signing this
     DRHP.




                                                     149
L) EXPERT OPINION OBTAINED, IF ANY

   Except as stated in “Statement of Tax Benefits”, the Company has not obtained any expert opinion.

M) EXPENSES OF THE ISSUE

   The Management estimates an expense or Rs.1000 Lacs towards issue expense. The expenses of this
   Issue include, among others, underwriting and management fees, selling commission, printing and
   distribution expenses, legal fees, statutory advertisement expenses and listing fees. The estimated
   Issue expenses are as follows:

                                                                                       (Rs. in Lacs)
    Sr.                    Nature of Expenses                      Amount*      % to the      % to
    No.                                                                           Total        the
                                                                                Expenses Issue
     1.    Lead Management Fee, Underwriting Commissions              [●]          [●]         [●]
           and Selling Commissions
     2.    Advertising and Marketing Expenses                         [●]           [●]       [●]
     3.    Printing and Stationery                                    [●]           [●]       [●]
     4.    Others (Registrar’s Fee, Legal Fee, etc.)                  [●]           [●]       [●]
           Total                                                      [●]           [●]       [●]
   * Will be incorporated after finalisation of Issue Price

N) DETAILS OF FEE PAYABLE

   Fees Payable to the Book Running Lead Managers and Syndicate Members
   The total fees payable to the Book Running Lead Manager and Syndicate Members (including
   underwriting commission and selling commission) will be as per the memorandum of understanding
   between the Company and the BRLM dated 05/09/2007 a copy of which is available for inspection
   at our registered office.

   Fees Payable to the Registrar to the Issue
   The fees payable by us to the Registrar to the Issue for processing of application, data entry,
   printing of CAN/refund order, preparation of refund data on magnetic tape, printing of bulk
   mailing register will be as per the memorandum of understanding dated 29/09/2007 between the
   Registrar to the Issue and the Company.
   The Registrar to the Issue will be reimbursed all out-of-pocket expenses including cost of stationery,
   postage, stamp duty and communication expenses. Adequate funds will be provided by us to the
   Registrar to the Issue to enable them to send refund orders or Allotment advice by registered
   post/speed post/under certificate of posting.

O) UNDERWRITING COMMISSION, BROKERAGE AND SELLING COMMISSION

   The underwriting commission and the selling commission for the Issue are as set out in the Syndicate
   Agreement amongst the Company, the BRLM and the Syndicate Member. The underwriting
   commission shall be paid as set out in the Syndicate Agreement based on the Issue price and the
   amount underwritten in the manner mentioned on page no. 150 of the DRHP.




                                                  150
P) PREVIOUS PUBLIC OR RIGHTS ISSUE

   The Company has not made any public or rights issue of shares either in India or abroad in the five
   years preceding the date of this DRHP.

Q) PREVIOUS ISSUE OF SHARES OTHERWISE THAN FOR CASH

   The Company has issued following equity shares for consideration otherwise than cash:

   3.   190530 equity shares of Rs.10/- each issued to shareholders of “Fasten Trading Ltd.” and “Priya
        Proteins Pvt. Ltd.” on merger with Surya Food & Agro Ltd. on 27/03/2002.
   4.   131000 equity shares of Rs.10/- each issued to shareholders of “Priyagold Industries (India) Ltd.”
        and “Kanhaiya Exports Pvt. Ltd.” on merger with Surya Food & Agro Ltd. on 29/03/2003.

R) COMMISSION AND BROKERAGE ON PREVIOUS ISSUES

   Since this is the initial public offer of the Company, no sum has been paid or has been payable as
   commission or brokerage for subscribing to or procuring or agreeing to procure subscription for any
   of the Equity Shares since inception of the Company.

S) CAPITAL ISSUE DURING THE LAST THREE YEARS

   Surya Food & Agro Limited and its group companies have not made any capital issue during the last
   three years.

T) PROMISE vis-a-vis PERFORMANCE

   This is a first issue of the Company and none of its group companies are listed on any stock
   exchanges in India.

U) OUTSTANDING DEBENTURES OR BONDS AND REDEEMABLE PREFERENCE SHARES
   AND OTHER INSTRUMENTS

   There are no outstanding debentures or bonds or redeemable preference shares and other
   instruments issued by the company as on the date of this DRHP.

V) STOCK MARKET DATA

   This being an initial public offering of the Company, the Equity Shares are not listed on any stock
   exchange.

W) INVESTOR GRIEVANCES AND REDRESSAL SYSTEM

   The company has appointed the registrar to the issue, to handle the investor grievances in co-
   ordination with the Compliance Officer of the Company. All grievances relating to the present issue
   may be addressed to the Registrar with a copy to the Compliance Officer, giving full details such as
   name, address of the applicant, number of equity shares applied for, amount paid on application and
   bank and branch. The Company would monitor the work of the registrar to ensure that the investor
   grievances are settled expeditiously and satisfactorily.




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  The Registrar to the issue, namely, Beetal Financial & Computer Services (P) Ltd., will handle
  investor’s grievances pertaining to the issue. A fortnightly status report of the complaints received
  and redressed by them would be forwarded to the company. The Company would also be co-
  ordinating with the registrar to the issue in attending to the grievances to the investor. The Company
  assures that the Board of Directors in respect of the complaints, if any, to be received shall adhere to
  the following schedules:

   Sr.   Nature of complaint                               Time Table
   No.
    1.   Non-receipt of refund                             Within 7 days of receipt of complaint
                                                           subject to production of satisfactory
                                                           evidence
    2.   Non Receipt of Share Certificate/Demat            Within 7 days of receipt of complaint
         Credit                                            subject to production of satisfactory
                                                           evidence
    3.   Any other complaint in relation to Public Issue   Within 7 days of receipt of complaint with
                                                           all relevant details

  Redressals of investors’ grievance are given top priority by the Company. The Committee oversees
  redressal of complaints of shareholders/investors and other important investor related matters. The
  Company has adequate arrangements for redressal of investor complaints as follows:

  Share transfer/ dematerialisation/ rematerialisation are handled by well equipped professionally
  managed Registrar and Transfer Agent, appointed by the Company in terms of SEBI’s direction for
  appointment of Common Agency for physical as well as demat shares. The Registrars are constantly
  monitored and supported by qualified and experienced personnel of the Company.

  We have appointed Mr. Rajesh Sodhi, Company Secretary as the Compliance Officer and he may be
  contacted in case of any pre-issue or post-issue problems. He can be contacted at the following
  address:
  Mr. Rajesh Sodhi
  Company Secretary & Compliance Officer
  Surya Food & Agro Limited
  D-1, Sector-2, Noida- 201301,
  District Gautam Budh Nagar, Uttar Pradesh
  Tel.: +91-0120-2552989; Fax: +91-0120-2558154;
  E-mail:investors@priyagold.com;

X) CHANGES IN AUDITORS
  There has been no change in the auditor of the Company since past three years.

Y) CAPITALIZATION OF RESERVES OR PROFITS DURING LAST 5 YEARS

  The company has issued 17293250 Equity Shares in the ratio 25:1 on 10/03/2007 by capitalizing
  reserves or profits.

Z) REVALUATION OF ASSETS DURING THE LAST 5 YEARS

  The company has not revalued its assets during the last 5 years.




                                                   152
                                   VIII. OFFERING INFORMATION

A) TERMS OF THE ISSUE

The Equity Shares being offered are subject to the provisions of the Companies Act, our
Memorandum and Articles of Association, the terms of this Draft Red Herring Prospectus, Red Herring
Prospectus, the Prospectus, the Bid-cum-Application Form, the Revision Form, the CAN and other
terms     and     conditions    as    may     be incorporated in the Allotment advices and other
documents/certificates that may be executed in respect of the Issue. The Equity Shares shall also be
subject to laws as applicable, guidelines, notifications and regulations relating to the issue of capital
and listing and trading of securities issued from time to time by SEBI, Government of India, the
Stock Exchanges, the Reserve Bank of India, ROC and/ or other authorities, as in force on the date of the
Issue and to the extent applicable.

RANKING OF EQUITY SHARES

The Equity Shares being offered shall be subject to the provisions of the Companies Act, our
Memorandum and Articles of Association and shall rank pari passu in all respects with the existing
Equity Shares including rights in respect of dividend. The Allottees will be entitled to dividend or any
other corporate benefits, if any, declared by the Company after the date of allotment.

MODE OF PAYMENT OF DIVIDEND

We shall pay dividend to our shareholders as per the provisions of the Companies Act, 1956.

FACE VALUE AND ISSUE PRICE

The face value of the Equity Shares is Rs. 10/- each and the Floor Price is Rs. [●] and the Cap Price is Rs.
[●] per Equity Share. At any given point of time there shall be only one denomination for the Equity
Shares subject to the applicable laws.

RIGHTS OF THE EQUITY SHAREHOLDERS

Subject to applicable laws, the equity shareholders shall have the following rights:

    Right to receive dividend, if declared;
    Right to attend general meetings and exercise voting powers, unless prohibited by law;
    Right to vote on a poll either in person or by proxy;
    Right to receive annual reports and notices to members;
    Right to receive offers for rights shares and be allotted bonus shares, if announced;
    Right to receive surplus on liquidation;
    Right of free transferability; and
    Such other rights, as may be available to a shareholder of a listed public company under the
    Companies Act, 1956 and the Memorandum and Articles of Association of the Company.

MARKET LOT

In terms of Section 68B of the Companies Act, 1956, the Equity Shares of the Company shall be
allotted only in dematerialized form. In terms of existing SEBI Guidelines, the trading in the Equity
Shares of the Company shall only be in dematerialized form for all investors. Since trading of our
Equity Shares will be in dematerialized mode, the tradable lot is one equity share. Allotment of Equity




                                                    153
Shares through this Issue will be done only in electronic form in multiples of one Equity Share subject to
a minimum Allotment of [●] Equity Shares.

NOMINATION FACILITY TO INVESTOR

In accordance with Section 109A of the Companies Act, the sole or first Bidder, along with other
joint Bidder(s), may nominate any one person in whom, in the event of death of the sole Bidder or in case
of joint Bidders, death of all the Bidders, as the case may be, the Equity Shares Allotted, if any, shall vest.
A person, being a nominee, entitled to the Equity Shares by reason of the death of the original
holder(s), shall in accordance with Section 109A of the Companies Act, be entitled to the same
advantages to which he or she would be entitled if he or she were the registered holder of the Equity
Share(s). Where the nominee is a minor, the holder(s) may make a nomination to appoint, in the
prescribed manner, any person to become entitled to Equity Share(s) in the event of his or her death
during the minority. A nomination shall stand rescinded upon a sale/transfer/alienation of Equity
Share(s) by the person nominating. A buyer will be entitled to make a fresh nomination in the manner
prescribed. A fresh nomination can be made only on the prescribed form available on request at the
registered office of the Company or at the registrar and transfer agent of the Company.

In accordance with Section 109B of the Companies Act, any person who becomes a nominee by virtue of
the provisions of Section 109A of the Companies Act, shall upon the production of such evidence
as may be required by our Board, elect either:

    To register himself or herself as the holder of the Equity Shares; or
    To make such transfer of the Equity Shares, as the deceased holder could have made.

Further, our Board may at any time give notice requiring any nominee to choose either to be registered
himself or herself or to transfer the Equity Shares, and if the notice is not complied with, within a period
of 90 days, our Board may thereafter withhold payment of all dividends, bonuses or other monies
payable in respect of the Equity Shares, until the requirements of the notice have been complied with.

Since the allotment of Equity Shares in the Issue will be made only in dematerialized form, there is no
need to make a separate nomination with us. Nominations registered with the respective depository
participant of the applicant would prevail. If the investors require changing the nomination, they are
requested to inform their respective depository participant.

MINIMUM SUBSCRIPTION

If we do not receive the minimum subscription of 90% of the Net Issue to the extent of the amount
including devolvement of the members of the Syndicate, if any, within 60 days from the Bid/ Issue
Closing Date, we shall forthwith refund the entire subscription amount received. If there is a delay
beyond 8 days after we become liable to pay the amount, we shall pay interest as per Section 73 of the
Companies Act.

ARRANGEMENTS FOR DISPOSAL OF ODD LOTS

The Company has not made any arrangements for the disposal of odd lots.

RESTRICTIONS ON TRANSFER OF SHARES

There are no restrictions on transfers and transmission of shares/ debentures and on their consolidation/
splitting.




                                                     154
                                        B. ISSUE STRUCTURE

Public Issue of [●] Equity Shares of face value Rs.10/- each for cash by the company issued at a price of
Rs.[●] per Equity Share, aggregating Rs.13590.75 Lacs (hereinafter referred to as the “Issue”). The Issue
would constitute [●]% of the post Issue paid-up capital of the Company. The Issue is being made through
the 100% Book Building Process:

                         QIBs                    Non-Institutional              Retail      Individual
                                                 Bidders                        Bidders
Number     of   Equity Upto [●] Equity Shares Upto [●]            Equity        Upto [●] Equity Shares
Shares*                will be allotted to QIBs. Shares      shall    be        shall be available for
                                                 available           for        allocation.
                                                 allocation.
Percentage of Issue Up to 50% of the Net                Upto 15% of the         Upto 35% of the Net
Size available for Issue (of which 5% shall             Net Issue or Net        Issue or Net Issue less
allocation          be reserved for Mutual              Issue less allocation   allocation to QIBs and
                    Funds)      Mutual     Funds        to QIBs and Retail      Non-Institutional
                    participating in the 5%             Portion*                Portion.*
                    reservation in the QIB
                    Portion will also be eligible
                    for    allocation   in    the
                    remaining QIB Portion.
                    The unsubscribed portion,
                    if any, in the Mutual
                    Fund reservation will be
                    available to QIBs.
Basis of allocation if Proportionate(a) [●] Equity Proportionate                Proportionate
respective    category Shares shall be available
is oversubscribed      for allocation      on     a
                       proportionate basis       to
                       Mutual Funds; and (b) [●]
                       Equity     Shares shall be
                       allotted on a proportionate
                       basis     to    all    QIBs,
                       including Mutual Funds
                       receiving allocation as per
                       (a) above.
Minimum Bid              Such number of Equity          Such     number     of [●] Equity Shares and
                         Shares that     the     Bid    Equity     Shares that in multiples of [●]
                         Amount exceeds Rs.100,000      the    Bid    Amount Equity Share thereafter.
                         and in multiples of [●]        exceeds Rs 100,000
                         Equity Shares thereafter.      and in multiples of
                                                        [●] Equity Shares
                                                        thereafter.
Maximum Bid              Not exceeding the size of      Not exceeding the       Such      number      of
                         the Issue     subject     to   size of the Issue       Equity      Shares per
                         regulations as applicable to   subject         to      Retail Individual Bidder
                         the Bidder                     regulations     as      so as to ensure that the
                                                        applicable  to the      Bid Amount does not
                                                        Bidder                  exceed Rs.100,000.



                                                  155
                        QIBs                           Non-Institutional         Retail       Individual
                                                       Bidders                   Bidders
Mode of Allotment       Compulsorily              in   Compulsorily         in   Compulsorily         in
                        dematerialized form.           dematerialized form.      dematerialized form.
Trading Lot             One Equity Share               One Equity Share          One Equity Share
Who can Apply **        Public             financial   Resident         Indian   Individuals (including
                        institutions, as specified     individuals, HUFs (in     HUFs in the name of
                        in Section 4A of the           the name of karta),       karta) applying for
                        Companies               Act:   companies, corporate      Equity Shares such
                        scheduled       commercial     bodies, societies and     that the Bid Amount
                        banks, mutual funds,           trusts.                   per Retail Individual
                        foreign        institutional                             Bidder     does     not
                        investors registered with                                exceed Rs.100,000 in
                        SEBI, multilateral and                                   value.
                        bilateral     development
                        financial      institutions,
                        foreign venture capital
                        funds     registered with
                        SEBI, State Industrial
                        Development
                        Corporations, permitted
                        insurance        companies
                        registered     with      the
                        Insurance        Regulatory
                        and          Development
                        Authority,        provident
                        funds     with minimum
                        corpus of Rs. 2500 Lacs
                        and pension funds with
                        minimum corpus of Rs.
                        2500 Lacs in accordance
                        with applicable law.
Terms of Payment        Margin           Amount        Margin          Amount    Margin         Amount
                        applicable to QIB Bidders      applicable to Non-        applicable to Retail
                        at the time of submission      institutional Bidder at   Individual Bidder at the
                        of Bid-cum-Application         the time of submission    time of submission of
                        Form to the Member of          of             Bid-cum-   Bid - cum - Application
                        Syndicate.                     Application Form to       Form to the Member
                                                       the        Member    of   of Syndicate.
                                                       Syndicate.
Margin Amount           10% of the Bid Amount in Full Bid Amount on Full Bid Amount on
                        respect of bids placed Bidding.             Bidding.
                        by    QIB    Bidder  on
                        Bidding.
* Subject to valid Bids being received at or above the Issue Price, under-subscription, if any, in
the Non-Institutional and Retail Individual categories would be allowed to be met with spillover inter-
se from any of the other categories, at the sole discretion of the Company, the BRLM and subject to
applicable provisions of the SEBI Guidelines.




                                                   156
** In case the Bid-cum-Application Form is submitted in joint names, the investors should ensure that the
demat account is also held in the same joint names and in the same sequence in which they appear
in the Bid-cum-Application Form.

If the aggregate demand by Mutual Funds is less than [●] Equity Shares, the balance Equity Shares
available for allocation in the Mutual Fund reservation will first be added to the QIB Portion
and be allocated proportionately to the QIB Bidders in proportion to their Bids.

Notice to QIBs: Allotment Reconciliation and Revised CANs

After the Bid/Issue Closing Date, an electronic book will be prepared by the Registrar on the basis of Bids
uploaded on the BSE/NSE system. Based on the electronic book, QIBs may be sent a CAN, indicating the
number of Equity Shares that may be allocated to them. This CAN is subject to the basis of final
Allotment, which will be approved by the Designated Stock Exchange and reflected in the reconciled
book prepared by the Registrar. Subject to SEBI Guidelines, certain Bid applications may be rejected due
to technical reasons, non-receipt of funds, cancellation of cheques, cheque bouncing, incorrect details, etc.,
and these rejected applications will be reflected in the reconciliation and basis of Allotment as approved
by the Designated Stock Exchange. As a result, a revised CAN may be sent to QIBs, and the allocation of
Equity Shares in such revised CAN may be different from that specified in the earlier CAN. QIBs should
note that they may be required to pay additional amounts, if any, by the Pay-in Date specified in the
revised CAN, for any increased allocation of Equity Shares. The CAN will constitute the valid, binding
and irrevocable contract (subject only to the issue of a revised CAN) for the QIB to pay the entire Issue
Price for all the Equity Shares allocated to such QIB. The revised CAN, if issued, will supersede in
entirety the earlier CAN.

Withdrawal of this Issue

The Company, in consultation with the BRLM, reserves the right not to proceed with this Issue at any
time, including after the Bid/ Issue Opening Date without assigning any reason thereof.

Bidding Period / Issue Period

  BID / ISSUE OPENS ON                       [●]
  BID / ISSUE CLOSES ON                      [●]

Bids and any revision in bids shall be accepted only between 10 a.m. and 3 p.m. (Indian Standard Time)
during the Bidding Period as mentioned above at the bidding centers mentioned on the Bid-cum-
Application Form except that on the Bid/Issue Closing Date, the Bids shall be accepted only between 10
a.m. and 1 p.m. (Indian Standard Time) or uploaded till such time as may be permitted by the BSE and
NSE on the Bid/Issue Closing Date.

The Price Band will be decided by the Company in consultation with the BRLM.

The Company reserves the right to revise the Price Band during the Bidding Period in accordance with
SEBI Guidelines. The cap on the Price Band should not be more than 20% of the floor of the Price Band.

In case of revision in the Price Band, the Bidding/Issue Period will be extended for three
additional working days after revision of the Price Band, subject to the Bidding Period / Issue Period
not exceeding ten working days. Any revision in the Price Band and the revised Bid/ Issue Period, if
applicable, will be widely disseminated by notification to the BSE and NSE by issuing a press
release, and also by indicating the change on the web site and at the terminals of the
members of the Syndicate.


                                                     157
C) ISSUE PROCEDURE

BOOK BUILDING PROCEDURE

The Issue is being made through the 100% Book Building Process wherein upto 50% of the Net Issue will
be allocated on a proportionate basis to Qualified Institutional Buyers (“QIBs”), out of which 5% shall be
available for allocation on a proportionate basis to Mutual Funds only. The remainder shall be available
for allocation on a proportionate basis to all QIBs, including Mutual Funds, subject to valid Bids being
received from them at or above the Issue Price. Further, upto 15% of the Issue shall be available for
allocation on a proportionate basis to Non-Institutional Bidders and upto 35% of the Issue shall be
available for allocation on a proportionate basis to Retail Individual Bidders, subject to valid Bids being
received at or above the Issue Price.

Bidders are required to submit their Bids through the members of the Syndicate. We, in consultation with
the BRLM reserve the right to reject any QIB Bid procured by any or all members of the Syndicate
provided the rejection is at the time of receipt of such Bids and the reason for rejection of the Bid is
communicated to the Bidder at the time of rejection of the Bid. In case of Non-Institutional Bidders, and
Retail Individual Bidders the Company would have a right to reject the Bids only on technical grounds.

BID CUM APPLICATION FORM

Bidders shall only use the specified Bid cum Application Form, bearing the stamp of a member of the
Syndicate for the purpose of making a Bid in terms of this Red Herring Prospectus. The Bidders
shall have the option to make a maximum of three Bids in the Bid cum Application Form and
such options shall not be considered as multiple Bids. Upon the allotment of Equity Shares, dispatch of
the CAN, and filing of the Prospectus with the ROC, the Bid cum Application Form shall be
considered as the Application Form. Upon completing and submitting the Bid cum Application Form
to a member of the Syndicate, the Bidder is deemed to have authorized our Company to make the
necessary changes in the Red Herring Prospectus and the Bid cum Application Form as would be
required for filing the Prospectus with the ROC and as would be required by the ROC after such filing,
without prior or subsequent notice of such changes to the Bidder.

The prescribed colour of the Bid cum Application Form for carious categories is as follows:

                               Category                                       Colour of Bid cum
                                                                              Application Form
Resident Indians, Eligible NRIs applying on a non-repatriation basis               White
Eligible NRIs and FIIs applying on a repatriation basis                             Blue

Who can Bid?

•   Persons eligible to invest under all applicable laws, rules, regulations and guidelines;
•   Indian nationals resident in India who are not minors in single or joint names (not more than three);
•   Hindu Undivided Families or HUFs, in the individual name of the Karta. The Bidder should specify
    that the Bid is being made in the name of the HUF in the Bid cum Application Form as
    follows: “Name of Sole or First bidder: XYZ Hindu Undivided Family applying through XYZ, where
    XYZ is the name of the Karta”. Bids by HUFs would be considered at par with those from
    individuals;
•   Companies, corporate bodies and societies registered under the applicable laws in India and
    authorized to invest in the equity shares;



                                                    158
•   Mutual Funds registered with SEBI;
•   Eligible NRIs on a repatriation basis or on a non-repatriation basis, subject to applicable laws. NRIs
    other than Eligible NRIs are not eligible to participate in this issue;
•   Indian Fnancial Institutions, commercial banks, regional rural banks, co-operative banks (subject to
    RBI regulations and the SEBI Guidelines and regulations, as applicable);
•   FIIs registered with SEBI;
•   Venture Capital Funds registered with SEBI;
•   State Industrial Development Corporations;
•   Trusts/ societies registered under the Societies Registration Act, 1860, as amended, or under any
    other law relating to trusts/ societies and who are authorized under their constitution to hold and
    invest in equity shares;
•   Scientific and/or industrial research organizations authorized to invest in equity shares;
•   Insurance Companies registered with Insurance Regulatory and Development Authority, India;
•   Provident Funds with minimum corpus of Rs. 250 million and who are authorized under their
    constitution to hold and invest in equity shares;
•   Pension Funds with a minimum corpus of Rs. 250 million and who are authorized under their
    constitution to hold and invest in equity shares; and
As per the existing regulations, OCBs cannot participate in this Issue.

Participation by associates of BRLM and Syndicate Members

The BRLM and Syndicate Members shall not be allowed to subscribe to this Issue in any manner except
towards fulfilling their underwriting obligations. However, associates and affiliates of the BRLMs and
Syndicate Members may subscribe for Equity Shares in the Issue, either in the QIB Portion and Non-
Institutional Portion where the allotment is on a proportionate basis.

Bids by Mutual Funds

An eligible Bid by a Mutual Fund shall first be considered for allocation proportionately in the Mutual
Funds Portion. In the event that the demand is greater than [●] Equity Shares, allocation shall be made to
Mutual Funds proportionately, to the extent of the Mutual Fund Portion. The remaining demand by
Mutual Funds shall, as part of the aggregate demand by QIBs, be available for allocation proportionately
out of the remainder of the QIB Portion, after excluding the allocation in the Mutual Funds Portion.
In case of a mutual fund, a separate Bid can be made in respect of each scheme of the mutual fund
registered with SEBI and such Bids in respect of more than one scheme of the mutual fund will not be
treated as multiple Bids provided that the Bids clearly indicate the scheme concerned for which the Bid
has been made.

As per the current regulations, the following restrictions are applicable for investments by mutual funds:

No mutual fund scheme shall invest more than 10% of its net asset value in the equity shares or equity
related instruments of any company provided that the limit of 10% shall not be applicable for
investments in index funds or sector or industry specific funds. No mutual fund under all its schemes
should own more than 10% of any company’s paid-up capital carrying voting rights.




                                                        159
Bids by Eligible NRIs

Bid cum Application Forms have been made available for Eligible NRIs at the registered office of the
Company and with members of the Syndicate and the Registrar to the Issue.

Eligible NRI applicants should note that only such Bids as are accompanied by payment in free
foreign exchange shall be considered for Allotment. The Eligible NRIs who intend to make payment
through Non-Resident Ordinary (NRO) accounts shall use the Bid cum Application Form meant for
Resident Indians.

Bids by FIIs

As per the current regulations, the following restrictions are applicable for investments by FIIs:

The issue of Equity Shares to a single FII should not exceed 10% of our post-Issue paid- up capital. In
respect of an FII investing in the Equity Shares on behalf of its sub-accounts, the investment on behalf of
each sub-account shall not exceed 10% of our total issued capital of the Company or 5% of the total
issued capital, in case such sub-account is a foreign corporate or an individual.

Subject to compliance with all applicable Indian laws, rules, regulations, guidelines and approvals in
terms of Regulation 15A(1) of the Securities Exchange Board of India (Foreign Institutional Investors)
Regulations 1995, as amended, an FII or its sub-account may issue, deal or hold, offshore
derivative instruments such as Participatory Notes, equity-linked notes or any other similar instruments
against underlying securities listed or proposed to be listed in any stock exchange in India only in favour
of those entities which are regulated by any relevant regulatory authorities in the countries of their
incorporation or establishment subject to compliance of “know your client” requirements. An FII or sub-
account shall also ensure that no further downstream issue or transfer of any instrument referred to
hereinabove is made to any person other than a regulated entity.

Bids by SEBI registered Venture Capital Funds

As per the current regulations, the following restrictions are applicable for SEBI registered Venture Capital Funds:

The SEBI (Venture Capital) Regulations, 1996 prescribe investment restrictions on venture capital funds
registered with SEBI. Accordingly, the holding by any individual venture capital fund registered with
SEBI in one company should not exceed 25% of the corpus of the venture capital fund. Further, Venture
Capital Funds can invest only upto 33.33% of the investible funds by way of subscription to an initial
public offer.

The above information is given for the benefit of the Bidders. The Company and the BRLM are not
liable for any amendments or modification or changes in applicable laws or regulations, which may
occur after the date of this Red Herring Prospectus. Bidders are advised to make their independent
investigations and ensure that the number of Equity Shares Bid for do not exceed the applicable limits
under laws or regulations.

Maximum and Minimum Bid Size

a) For Retail Individual Bidders: The Bid must be for a minimum of [●] Equity Shares and in multiples
   of [●] Equity Shares thereafter, so as to ensure that the Bid Price payable by the Bidder does not
   exceed Rs.100,000. In case of revision of Bids, the Retail Individual Bidders have to ensure that the
   Bid Price does not exceed Rs. 100,000. In case the Bid Price is over Rs. 100,000 due to revision of the
   Bid or revision of the Price Band or on exercise of Cut-off option, the Bid would be considered for



                                                         160
     allocation under the Non-Institutional Bidders portion. The Cut-off option is an option given only to
     the Retail Individual Bidders indicating their agreement to Bid and purchase at the final Issue Price as
     determined at the end of the Book Building Process.

b) For Other Bidders (Non-Institutional Bidders and QIBs): The Bid must be for a minimum of such
   number of Equity Shares such that the Bid Amount exceeds Rs.100,000 and in multiples of [●] Equity
   Shares thereafter. A Bid cannot be submitted for more than the Net Issue. However, the maximum
   Bid by a QIB investor should not exceed the investment limits prescribed for them by applicable laws.
   Under the existing SEBI Guidelines, a QIB Bidder cannot withdraw its Bid after the Bid/Issue
   Closing Date and is required to pay QIB Margin Amount upon submission of the Bid.

     In case of revision in Bids, the Non-Institutional Bidders, who are individuals, have to ensure that the
     Bid Amount is greater than Rs. 100,000 for being considered for allocation in the Non-Institutional
     Portion. In case the Bid Amount reduces to Rs. 100,000 or less due to a revision in Bids or revision of
     the Price Band, Bids by Non-Institutional Bidders who are eligible for allocation in the Retail Portion
     would be considered for allotment under the Retail Portion. Non-Institutional Bidders and QIBs are
     not allowed to Bid at ‘Cut-Off’.

     Bidders are advised to ensure that any single Bid from them does not exceed the investment limits
     or maximum number of Equity Shares that can be held by them under applicable law or
     regulation or as specified in this Red Herring Prospectus.

Information for the Bidders:

1.   The Company will file the Red Herring Prospectus with the Designated Stock Exchange at least 3
     (three) days before the Bid/Issue Opening Date.
2.   The Company and the BRLM shall declare the Bid/ Issue Opening Date, Bid/ Issue Closing Date and
     Price Band at the time of filing the Red Herring Prospectus with the Designated Stock Exchange and
     also publish the same in three widely circulated newspapers (one each in English and Hindi). This
     advertisement, shall be in the format prescribed in Schedule XX-A of the SEBI Guidelines.
3.   The members of the Syndicate will circulate copies of the Red Herring Prospectus along with the Bid
     cum Application Form to potential investors.
4.   Any investor (who is eligible to invest in our Equity Shares) who would like to obtain the Red
     Herring Prospectus and/ or the Bid cum Application Form can obtain the same from our
     Head Office or from any of the members of the Syndicate and should approach any of the BRLM or
     Syndicate Members or their authorized agent(s) to register their bids.
5.   The Members of the Syndicate shall accept Bids from the Bidders during the Issue Period in
     accordance with the terms of the Syndicate Agreement.
6.   The Bids should be submitted on the prescribed Bid cum Application Form only. Bid cum
     Application Forms should bear the stamp of the members of the Syndicate. Bid cum Application
     Forms, which do not bear the stamp of the members of the Syndicate, will be rejected.
7.   The Biding/ Issue Period shall be for a minimum of 3 (three) working days and not exceeding 7
     (seven) working days. In case the Price Band is revised, the revised Price Band and the Bidding/
     Issue Period will be published in two weekly circulated national newspapers (one each in English
     and Hindi) and the Bidding/ Issue Period may be extended, if required, by an additional 3 (three)
     days, subject to the total Bidding/ Issue Period not exceeding 10 (ten) working days.




                                                     161
8.   The Price Band has been fixed at Rs.[●] to Rs.[●] per Equity Share of Rs. 10 each, Rs. [●] being the
     lower end of the Price Band and Rs. [●] being the higher end of the Price Band. The Bidders can bid at
     any price with in the Price Band, in multiples of Rs.1 (One)
9.   The Company in consultation with the BRLM, reserve the right to revise the Price Band, during the
     Bidding/ Issue Period, in accordance with SEBI Guidelines. The higher end of the Price Band should
     not be more than 20% of the lower end of the Price Band. Subject to compliance with the immediately
     preceding sentence, the lower end of the Price Band can move up or down to the extent of 20% of the
     lower end of the Price Band disclosed in the Red Herring Prospectus.
10. In case of revision in the Price Band, the Bidding/ Issue Period will be extended for 3 (three)
    additional working days after revision of Price Band subject to a maximum of 10 (ten) working days.
    Any revision in the Price Band and the revised Bidding/ Issue Period, if applicable, will be widely
    disseminated by notification to BSE and NSE, by issuing a public notice in three widely circulated
    newspapers (one each in English and Hindi) with wide circulation, and also by indicating the change
    on the websites of the BRLM and at the terminals of the Syndicate Members.
11. The Company in consultation with the BRLM, can finalize the Issue Price within the Price Band
    without the prior approval of, or intimation, to the Bidders.


Method and Process of Bidding

1.   Each Bid cum Application Form will give the Bidder the choice to bid for up to three optional prices
     (for details refer to the paragraph titled “Bids at Different Price Levels and Revision of Bids” on page
     163 of this Red Herring Prospectus within the Price Band and specify the demand (i.e., the
     number of Equity Shares Bid for) in each option. The price and demand options submitted by
     the Bidder in the Bid cum Application Form will be treated as optional demands from the Bidder and
     will not be cumulated. After determination of the Issue Price, the maximum number of Equity Shares
     Bid for by a Bidder at or above the Issue Price will be considered for allocation/ Allotment and the
     rest of the Bid(s), irrespective of the Bid Price, will become automatically invalid.
2.   The Bidder cannot Bid on another Bid cum Application Form after Bid(s) on one Bid cum
     Application Form have been submitted to any member of the Syndicate. Submission of a second Bid
     cum Application Form to either the same or to another member of the Syndicate will be treated as
     multiple Bids and is liable to be rejected either before entering the Bid into the electronic bidding
     system, or at any point of time prior to the allocation or Allotment of Equity Shares in this Issue.
     However, the Bidder can revise the Bid through the Revision Form, the procedure for which is
     detailed under the paragraph titled “Bids at Different Price Levels and Revision of Bids” on page 163
     of this Red Herring Prospectus.
3.   The members of the Syndicate will enter each Bid option into the electronic bidding system as a
     separate Bid and generate a Transaction Registration Slip (“TRS”) for each price and demand option
     and give the same to the Bidder. Therefore, a Bidder can receive up to three TRSs for each Bid cum
     Application Form.
4.   During the Bidding/Issue Period, Bidders may approach the members of the Syndicate to submit
     their Bid. Every member of the Syndicate shall accept Bids from all clients/investors who place
     orders through them and shall have the right to vet the Bids, subject to the terms of the Syndicate
     Agreement and this Red Herring Prospectus.
5.   Along with the Bid cum Application Form, all Bidders will make payment in the manner described
     under the paragraph titled “Terms of Payment and Payment into the Escrow Accounts” on page 171
     of this Red Herring Prospectus.




                                                     162
Bids at Different Price Levels and Revision of Bids

1.   The Bidder can bid at any price within the Price Band. The Bidder has to bid for the desired number
     of Equity Shares at a specific price. Retail Individual Bidders applying for a maximum Bid in any of
     the bidding options not exceeding Rs. 100,000 may bid at Cut-Off Price. However, bidding at Cut-Off
     Price is prohibited for QIB, Non-Institutional Bidders bidding in excess of Rs. 100,000 and such bids
     shall be rejected.
2.   Retail Individual Bidders who bid at the Cut-Off Price agree that they shall purchase the Equity
     Shares at any price within the Price Band. Retail Individual Bidders bidding at Cut-Off Price shall
     deposit the Bid Price based on the higher end of the Price Band in the Escrow Account. In the event
     the Bid Price is higher than the subscription amount payable by the Retail Individual Bidders who
     Bid at Cut off Price (i.e., the total number of Equity Shares allocated in the Issue multiplied by the
     Issue Price), the Retail Individual Bidders who Bid at Cut off Price, shall receive the refund of the
     excess amounts from the Escrow Account.
3.   In case of an upward revision in the Price Band announced as above, Retail Individual Bidders who
     had Bid at Cut-off Price could either (i) revise their Bid or (ii) make additional payment based on the
     higher end of the Revised Price Band (such that the total amount i.e., original Bid Price plus
     additional payment does not exceed Rs. 100,000 for Retail Individual Bidders, if the Bidder wants
     to continue to Bid at Cut-off Price), with the members of the Syndicate to whom the original
     Bid was submitted. In case the total amount (i.e., original Bid Price plus additional payment) exceeds
     Rs. 100,000 for Retail Individual Bidders the Bid will be considered for allocation under the Non-
     Institutional Portion in terms of this Red Herring Prospectus. If, however, the Bidder does not either
     revise the Bid or make additional payment and the Issue Price is higher than the higher end of the
     Price Band prior to revision, the number of Equity Shares Bid for shall be adjusted downwards for the
     purpose of Allotment, such that no additional payment would be required from the Bidder and
     such Bidder is deemed to have approved such revised Bid at Cut-off Price.
4.   In case of a downward revision in the Price Band, announced as above, Retail Individual Bidders
     who have Bid at Cut-off Price could either revise their Bid or the excess amount paid at the time of
     bidding would be refunded from the Escrow Account.
5.   In the event of any revision in the Price Band, whether upwards or downwards, the minimum
     application size shall remain [●] Equity Shares irrespective of whether the Bid Price payable on
     such minimum application is not in the range of Rs. 5,000 to Rs. 7,000.
6.   During the Bidding/ Issue Period, any bidder who has registered his or her interest in the Equity
     Shares at a particular price level is free to revise his or her Bid within the Price Band using the printed
     Revision Form, which is a part of the Bid cum Application Form.
7.   Revisions can be made in both the desired number of Equity Shares and the Bid price by using the
     Revision Form. The Bidder must also mention the details of all the options in his or her Bid cum
     Application Form or earlier Revision Form. For example, if a Bidder has Bid for three options in the
     Bid cum Application Form and he is changing only one of the options in the Revision Form, he must
     complete all the details of the other two options that are not being revised, in the Revision Form. The
     members of the Syndicate will not accept incomplete or inaccurate Revision Forms.
8.   The Bidder can make this revision any number of times during the Bidding/ Issue Period. However,
     for any revision(s) in the Bid, the Bidders will have to use the services of the same member of the
     Syndicate through whom he or she had place the original Bid.
9.   Bidders are advised to retain copies of the blank Revision Form and the revised Bid must be made
     only in such Revision Form or copies thereof.




                                                      163
10. Any revision of the Bid shall be accompanied by payment in the form of cheque or demand draft for
    the incremental amount, if any, to be paid on account of the upward revision of the Bid. The excess
    amount, if any, resulting from downward revision of the Bid would be returned to the Bidder at the
    time of refund in accordance with the terms of this Red Herring Prospectus. In case of the QIB
    Bidders, the members of the Syndicate shall collect the payment in the form of cheque or demand
    draft or electronic transfer of funds through RTGS for the incremental amount in the QIB Margin
    Amount, if any, to be paid on account of the upward revision of the Bid at the time of one or more
    revisions by the QIB Bidders.
11. When a Bidder revises his or her Bid, he or she shall surrender the earlier TRS and get a revised TRS
    from the members of the Syndicate. It is the responsibility of the Bidder to request for and obtain
    the revised TRS, which will act as proof of revision of the original bid.

Escrow Mechanism

We shall open Escrow Accounts with the Escrow Collection Banks for the collection of the Bid
Amounts payable upon submission of the Bid cum Application Form and for amounts payable pursuant
to allotment in the Issue.

The Escrow Collection Banks will act in terms of the Red Herring Prospectus and the Escrow Agreement.
The Escrow Collection Bank(s) for and on behalf of the Bidders shall maintain the monies in the Escrow
Account. The Escrow Collection Banks shall not exercise any lien whatsoever over the monies deposited
therein and shall hold the monies therein in trust for the Bidders. On the Designated Date, the Escrow
Collection Bank(s) shall transfer the funds equivalent to the size of the Issue from the Escrow Account, as
per the terms of the Escrow Agreement, into the Issue Account shall be held for the benefit of the Bidders
who are entitled to refunds. Payments of refund to the Bidders shall also be made from the Refund
Account as per the terms of the Escrow Agreement and this Red Herring Prospectus.

The Bidders should note that the escrow mechanism is not prescribed by SEBI and has been established
as an arrangement between us, the Syndicate, the Escrow Collection Bank(s) and the Registrar to the Issue
to facilitate collections from the Bidders.

Electronic Registration of Bids

1.   The Members of the Syndicate will register the Bids using the on-line facilities of the BSE and the
     NSE. There will be at least one on-line connectivity in each city, where a stock exchange is located in
     India and where Bids are being accepted.
2.   The BSE and the NSE will offer a screen-based facility for registering Bids for the Issue. This
     facility will be available on the terminals of the Members of the Syndicate and their
     authorized agents during the Bidding/Issue Period. The members of the Syndicate can also set
     up facilities for off-line electronic registration of Bids subject to the condition that they will
     subsequently upload the off-line data file into the on-line facilities for book building on a regular
     basis. On the Bid/Issue Closing Date, the Members of the Syndicate shall upload the Bids until such
     time as may be permitted by the Stock Exchanges.
3.   The aggregate demand and price for Bids registered on the electronic facilities of the BSE and the
     NSE will be uploaded on a regular basis, consolidated and displayed on-line at all bidding centres
     and the website of BSE and NSE. A graphical representation of consolidated demand and price
     would be made available at the bidding centres during the Bidding/ Issue Period.
4.   At the time of registering each Bid, the members of the Syndicate shall enter the following details of
     the investor in the on-line system:




                                                    164
         Name of the investor
         Investor category – Individual, Corporate, Eligible NRI, FII or Mutual Fund, QIBs, etc;
         Numbers of Equity Shares bid for;
         Bid price;
         Bid cum Application Form number;
         Whether Margin Amount has been paid upon submission of Bid cum Application Form
         Depository Participant identification number and client identification number of the
         beneficiary account of the Bidder.

5.   A system generated TRS will be given to the Bidder as a proof of the registration of each of the
     bidding options. It is the Bidder’s responsibility to obtain the TRS from the members of the Syndicate.
     The registration of the Bid by the member of the Syndicate does not guarantee that the Equity Shares
     shall be allocated/ Alloted either by the members of the Syndicate or our Company.
6.   Such TRS will be non-negotiable and by itself will not create any obligation of any kind.
7.   In case of QIB bidders, members of the syndicate also have the right to accept the bid or reject it.
     However, such rejection should be made at the time of receiving the bid and only after assigning a
     reason for such rejection in writing. In case of Non-Institutional Bidders, Retail Individual Bidders,
     Bids would not be rejected except on the technical grounds mentioned on page 174 of this Red
     Herring Prospectus.
8.   It is also to be distinctly understood that the approval given by the BSE and the NSE to use their
     network and software of the online IPO system should not in any way be deemed or construed that
     this Red Herring Prospectus has been cleared or approved by the BSE and NSE; nor does it in any
     manner warrant, certify or endorse the correctness or completeness of any of the contents of this Red
     Herring Prospectus; nor does it warrant that our Equity Shares will be listed or will continue
     to be listed on the BSE and NSE.
9.   Only bids that are uploaded on the online IPO system of the NSE and BSE shall be considered for
     allocation/ Allotment. In case of discrepancy of data between the BSE or the NSE and the members of
     the Syndicate, the decision of the BRLM based on the physical records of the Bid cum Application
     Forms shall be final and binding on all concerned.


Bids and revisions of Bids must be:

1.   Made only in the prescribed Bid cum Application Form or Revision Form, as applicable (white colour
     for Resident Indians and blue colour for NRIs and FIIs applying on repatriation basis).
2.   Completed in full, in BLOCK LETTERS in English and in accordance with the instructions
     contained herein, in the Bid cum Application Form or in the Revision Form. Incomplete Bid cum
     Application Forms or Revision Forms are liable to be rejected.
3.   For Retail Individual Bidders, the Bid must be for a minimum of [●] Equity Shares and in multiples of
     [●] Equity Shares thereafter subject to a maximum Bid Amount of Rs. 100,000.
4.   For Non-Institutional Bidders and QIB Bidders, Bids must be for a minimum of such number of
     Equity Shares such that the Bid Amount exceeds Rs. 100,000 and in multiples of [●] Equity Shares
     thereafter. Bids cannot be made for more than the Issue size. Bidders are advised to ensure that a
     single Bid from them should not exceed the investment limits or maximum number of shares that can
     be held by them under the applicable laws and regulations.
5.   Bids by NRIs for a Bid Price of up to Rs. 100,000 would be considered under the Retail Portion for the
     purpose of allocation and Bids for a Bid Price of more than Rs. 100,000 would be considered under
     Non-Institutional Portion for the purpose of allocation.



                                                    165
6.   Bids by other eligible Non Resident Bidders for a minimum of such number of Equity Shares and in
     multiples of [●] Equity Shares thereafter that the Bid Price exceeds Rs. 100,000.
7.   Bids by Non Residents, NRIs, FIIs and Foreign Venture Capital Funds registered with SEBI on a
     repatriation basis shall be in the names of individuals, or in the names of FIIs but not in the names of
     minors, OCBs, firms and partnerships, foreign nationals (excluding NRIs) or their nominees.
8.   In single name or in joint names (not more than three, and in the same order as their Depository
     Participant details).
9.   Thumb impressions and signatures other than in the languages specified in the Eighth
     Schedule in the Constitution of India must be attested by a Magistrate or a Notary Public or a
     Special Executive Magistrate under official seal.


Price Discovery and Allocation

1.   After the Bid/Issue Closing Date, the BRLM shall analyze the demand generated at various price
     levels and discuss pricing strategy with the Company.
2.   Our Company in consultation with the BRLM, shall finalize the Issue Price, the number of
     Equity Shares to be allotted in each investor category.
3.   The allocation to QIBs will be upto 50% of the Net Issue and the availability for allocation to Non-
     Institutional and Retail Individual Bidders will not be less than 15% and 35% of the Net Issue
     respectively, and, would be on proportionate basis, in the manner specified in the SEBI Guidelines
     and this Red Herring Prospectus, in consultation with Designated Stock Exchange, subject to valid
     Bids being received at or above the Issue Price.
4.    Under-subscription, if any, in the Non-Institutional category and the Retail Individual category
     would be met with spill over from any other category at the sole discretion of the Company in
     consultation with the BRLM. However, if the aggregate demand by Mutual Fund is less than [●]
     Equity Shares, the balance Equity Shares available for allocation in the Mutual Fund Portion will first
     be added to the QIB Portion and be allotted proportionately to the QIB Bidders. In the event that the
     aggregate demand in the QIB Portion has been met with spill-over from any other category or
     combination of categories at the discretion of the Company, in consultation with BRLM and the
     Designated Stock Exchange.
5.   Allocation to Eligible NRIs, FIIs, foreign venture capital funds registered with SEBI applying on
     repatriation basis will be subject to applicable law and the terms and conditions stipulated by the
     RBI.


Signing of Underwriting Agreement and Filing with the Designated Stock Exchange

(a) We, the BRLM and the Syndicate Members shall enter into an Underwriting Agreement on
    finalization of the Issue Price and allocation/ Allotment to the Bidders.
(b) After signing the Underwriting Agreement, we would update and file the updated Red Herring
    Prospectus with the Designated Stock Exchange, which then would be termed ‘Prospectus’. The
    Prospectus would have details of the Issue Price, Issue size, underwriting arrangements and would
    be complete in all material respects.

Filing of the Prospectus with the Registrar of Companies

We will file a copy of the Prospectus with the Registrar of Companies in terms of Section 56, Section 60
and Section 60B of the Companies Act.



                                                     166
Announcement of pre-Issue Advertisement

Subject to Section 66 of the Companies Act, the Company shall after receiving final observations, if any,
on the Red Herring prospectus from SEBI, publish an advertisement, in the form prescribed by the SEBI
Guidelines in two widely circulated newspapers (one each in English & Hindi).

Issuance of Confirmation of Allocation Note (“CAN”)

(a) Upon approval of the basis of Allotment by the Designated Stock Exchange, the BRLM or the
    Registrar to the Issue shall send to the members of the Syndicate a list of their Bidders who have been
    allocated Equity Shares in the Issue. The approval of the basis of Allotment by the Designated
    Stock Exchange for QIB Bidders may be done simultaneously with or prior to the approval of the
    basis of allocation for Retail Bidders and Non-Institutional Bidders. However, the investor should
    note that the Company shall ensure that the date of Allotment of the Equity Shares to all investors in
    this Issue shall be done on the same date.

(b) The BRLM or the members of the Syndicate would then dispatch the CAN to their Bidders who have
    been allocated Equity Shares in the Issue. The dispatch of a CAN shall be deemed a valid,
    binding and irrevocable contract for the Bidder to pay the entire Issue Price for all the Equity Shares
    allocated to such Bidder. Those Bidders who have not paid the entire Bid Amount into the Escrow
    Account at the time of bidding shall pay in full the amount payable into the Escrow Account by the
    Pay-in Date specified in the CAN.

(c) Bidders who have been allocated Equity Shares and who have already paid the Bid Amount into the
    Escrow Account at the time of bidding shall directly receive the CAN from the Registrar to the
    Issue subject, however, to realisation of their cheque or demand draft paid into the Escrow Account.
    The dispatch of a CAN shall be deemed as a valid, binding and irrevocable contract for the Bidder to
    pay the entire Issue Price for all Allotted to such Bidder.

(d) The Issuance of CAN is subject to “Notice to QIBs - Allotment Reconciliation and Revised CANs” as
    set forth herein.

Notice to QIBs: Allotment Reconciliation and Revised CANs

After the Bid/Issue Closing Date, an electronic book will be prepared by the Registrar on the
basis of Bids uploaded on the BSE/NSE system. This shall be followed by a physical book prepared by
the Registrar on the basis of Bid-cum-Application Forms received. Based on the electronic book or the
physical book, as the case may be, QIBs may be sent a CAN, indicating the number of Equity Shares that
may be allocated to them. This CAN is subject to the basis of final allotment, which will be approved by
the Designated Stock Exchange and reflected in the reconciled book prepared by the Registrar. Subject to
SEBI Guidelines, certain Bid cum Applications Forms may be rejected due to technical reasons, non-
receipt of funds, cancellation of cheques, cheque bouncing, incorrect details, etc., and these rejected
applications will be reflected in the reconciliation and basis of Allotment as approved by the
Designated Stock Exchange. As a result, a revised CAN may be sent to QIBs and the allocation of Equity
Shares in such revised CAN may be different from that specified in the earlier CAN. QIBs should note
that they may be required to pay additional amounts, if any, by the Pay-in Date specified in the revised
CAN, for any increased allotment of Equity Shares. The CAN will constitute the valid, binding and
irrevocable contract (subject only to the issue of a revised CAN) for the QIB to pay the entire Issue Price
for all the Equity Shares allocated to such QIB. Any revised CAN, if issued, will supersede in
entirety the earlier CAN.




                                                   167
Designated Date and Allotment of Equity Shares

(a) Our Company will ensure that the Allotment of Equity Shares is done within 15 days of the
    Bid/Issue Closing Date. After the funds are transferred from the Escrow Accounts to the Issue
    Account on the Designated Date, we would ensure the credit to the successful Bidders
    depository account. Allotment of the Equity Shares to the successful Bidders depository account
    within 2 working days of the date of allotment.
(b) In accordance with the SEBI Guidelines, Equity Shares will be issued and Allotment shall be made
    only in the dematerialized form to the Allottees.
(c) Allottees will have the option to re-materialize the Equity Shares, if they so desire, as per the
    provisions of the Depositories Act.
Investors are advised to instruct their Depository Participant to accept the Equity Shares that
may be allocated/ Allotted to them pursuant to this Issue.


GENERAL INSTRUCTIONS
Do’s:
a) Check if you are eligible to apply;
b) Read all the instructions carefully and complete the applicable Resident Bid cum Application Form
   (White in colour) or Non Resident Bid cum Application Form (Blue in colour);
c)   Ensure that the details about Depository Participant and beneficiary account are correct as Allotment
     of Equity Shares will be in the DEMATERIALIZED form only;
d) Ensure that the Bids are submitted at the bidding centres only on forms bearing the stamp of a
   member of the Syndicate;
e) Ensure that have been given a TRS for all your Bid options;
f)   Submit revised Bids to the same member of the Syndicate through whom the original Bid was placed
     and obtain a revised TRS;
g) Each of the Bidders, should mention his/ her Permanent Account Number (PAN) allotted under the
   IT Act. The copies of the PAN Card or PAN Allotment letter should be submitted with the Bid cum
   Application form. If you have mentioned “Applied for” or “Not Applicable” in the Bid cum
   Application Form in the section dealing with PAN number, ensure that you submit Form 60 or Form
   61 as the case may be, together with permissible documents as address proof;
h) Ensure that the Demographic Details (as defined herein below) are updated, true and correct in all
   respects; and
i)   Ensure that the name(s) given in the Bid cum Application Form is exactly the same as the name(s) in
     which the beneficiary account is held with the Depository Participant. In case the Bid cum
     Application Form is submitted in joint names, ensure that the beneficiary account is also held in same
     joint names and such names are in the same sequence in which they appear in the Bid cum
     Application Form.


Don’ts:

a) Do not Bid for lower than the minimum Bid size;




                                                    168
b) Do not Bid/revise Bid Price to less than the lower end of the Price Band or higher than the higher end
   of the Price Band;
c)   Do not Bid on another Bid cum Application Form after you have submitted a Bid to the members of
     the Syndicate;
d) Do not pay the Bid Price in cash, by money order or by postal order or by stockinvest;
e) Do not send Bid cum Application Forms by post; instead submit the same to a member of the
   Syndicate only;
f)   Do not Bid at Cut-off Price (for QIB Bidders and Non-Institutional Bidders, for bid amount in excess
     of Rs. 100,000);
g) Do not fill up the Bid cum Application Form such that the Equity Shares Bid for exceeds the Issue size
   and/or investment limit or maximum number of Equity Shares that can be held under the applicable
   laws or regulations or maximum amount permissible under the applicable regulations;
h) Do not submit the Bid without the QIB Margin Amount, in case of a Bid by a QIB;
i)   Do not submit the GIR number instead of the PAN as the Bid is liable to be rejected on this ground.


Instructions for Completing the Bid cum Application Form

Bidders can obtain Bid cum Application Forms and/or Revision Forms from the members of the
Syndicate.

Bidder’s Depository Account and Bank Account Details

Bidders should note that on the basis of name of the Bidders, Depository Participant’s name,
Depository Participant-Identification number and Beneficiary Account Number provided by them
in the Bid cum Application Form, the Registrar to the Issue will obtain from the Depository the
demographic details including address, Bidders bank account details, MICR code and occupation
(hereinafter referred to as “Demographic Details”). Since the Issue is being made entirely in the
dematerialized form, the Bank Account details used for giving refunds to the Bidders to whom an
electronic refund is being made will also be taken from the data provided by such Bidder to the
Depository Participant. Hence, Bidders are advised to immediately update their Bank Account details as
appearing on the records of the Depository Participant. Please note that failure to do so could result in
delays in despatch/ credit of refunds to Bidders at the Bidders sole risk and neither the BRLM or the
Registrar or the Escrow Collection Banks nor the Bank shall have any responsibility and undertake any
liability for the same. Hence, Bidders should carefully fill in their Depository Account details in the Bid
cum Application Form.

IT IS MANDATORY FOR ALL THE BIDDERS TO GET THEIR EQUITY SHARES
IN DEMATERIALIZED FORM. ALL BIDDERS SHOULD MENTION THEIR DEPOSITORY
PARTICIPANT’S NAME, DEPOSITORY PARTICIPANT IDENTIFICATION NUMBER AND
BENEFICIARY ACCOUNT NUMBER IN THE BID CUM APPLICATION FORM. INVESTORS
MUST ENSURE THAT THE NAME GIVEN IN THE BID CUM APPLICATION FORM IS EXACTLY
THE SAME AS THE NAME IN WHICH THE DEPOSITORY ACCOUNT IS HELD. IN CASE
THE BID CUM APPLICATION FORM IS SUBMITTED IN JOINT NAMES, IT SHOULD BE
ENSURED THAT THE DEPOSITORY ACCOUNT IS ALSO HELD IN THE SAME JOINT
NAMES AND ARE IN THE SAME SEQUENCE IN WHICH THEY APPEAR IN THE BID CUM
APPLICATION FORM.




                                                    169
These Demographic Details would be used for all correspondence with the Bidders including
mailing of the CANs/Allotment Advice and printing of Bank particulars on the refund orders. The
Demographic Details given by Bidders in the Bid cum Application Form would not be used for any other
purpose by the Registrar to the Issue.

By signing the Bid cum Application Form, the Bidder would have deemed to have authorized the
Depositories to provide, upon request, to the Registrar to the Issue, the required Demographic Details as
available on its records.

In case of Bidders not receiving refunds through electronic transfer of funds, delivery of refund
orders/ allocation advice/ CANs may get delayed if the same, once sent to the address obtained from
the Depositories, are returned undelivered. In such an event, the address and other details given by
the Bidder in the Bid cum Application Form would be used only to ensure dispatch of refund orders.
Please note that any such delay shall be at the Bidders sole risk and neither the Bank, the Registrar,
Escrow Collection Bank(s) nor the BRLM shall be liable to compensate the Bidder for any losses
caused to the Bidder due to any such delay or pay any interest for such delay. In case of Bidders
receiving refunds through electronic modes, Bidders may note that refunds may get delayed if Bank
particulars obtained from the Depository Participant are incorrect.

In case no corresponding record is available with the Depositories that matches three parameters,
namely, names of the Bidders (including the order of names of joint holders), the Depository Participant’s
identity (DP ID) and the beneficiary’s identity, then such Bids are liable to be rejected.

Refunds, dividends and other distributions, if any, will be payable in Indian Rupees only at
the prevailing exchange rate and net of bank charges and/or commission. In case of Bidders who
remit money through Indian Rupee drafts purchased abroad, such payments in Indian Rupees will be
converted into US Dollars or any other freely convertible currency as may be permitted by the RBI at
the rate of exchange prevailing at the time of remittance and will be dispatched by registered post or if
the Bidders so desire, will be credited to their NRE accounts, details of which should be furnished in
the space provided for this purpose in the Bid cum Application Form. Our Company will not be
responsible for loss, if any, incurred by the Bidder on account of conversion of foreign currency.

Bids under Power of Attorney

In case of Bids made pursuant to a power of attorney or by limited companies, corporate bodies,
registered societies, a certified copy of the power of attorney or the relevant resolution or authority, as the
case may be, along with a certified copy of the Memorandum and Articles of Association and/or bye
laws must be along with the Bid cum Application Form. Failing this, we reserve the right to accept or
reject any Bid in whole or in part, in either case, without assigning any reason therefore.

In case of Bids made pursuant to a Power of Attorney by FIIs, a certified copy of the Power of Attorney or
the relevant resolution or authority as the case may be, along with a certified copy of their SEBI
registration certificate must be lodged along with the Bid cum Application Form. In case of Bids made by
Mutual Funds, venture capital funds registered with SEBI and FVCIs, a certified copy of their SEBI
registration certificate must be lodged along with the Bid cum Application Form. Failing this, the
Company reserves the right to accept or reject any Bid in whole or in part, in either case, without
assigning any reason therefore.

In case of the Bids made by insurance companies registered with the Insurance Regulatory and
Development Authority, a certified copy of certificate of registration issued by Insurance
Regulatory and Development Authority must be lodged along with the Bid cum Application Form.




                                                     170
Failing this, we reserve the right to accept or reject any Bid in whole or in part, in either case, without
assigning any reason therefore.

In case of the Bids made by provident funds with minimum corpus of Rs. 250 million (subject to
applicable law) and pension funds with minimum corpus of Rs. 250 million, a certified copy of
certificate from a chartered accountant certifying the corpus of the provident fund/pension fund
must be lodged along with the Bid cum Application Form. Failing this, we reserve the right to accept or
reject any Bid in whole or in part, in either case, without assigning any reason therefore.

We, in our absolute discretion, reserves the right to relax the above condition of simultaneous
submission of the power of attorney along with the Bid cum Application Form, subject to such terms and
conditions that we and the BRLM may deem fit.

PAYMENT INSTRUCTIONS

Our Company shall open Escrow Accounts with the Escrow Collection Bank(s) for the collection of the
Bid Amounts payable upon submission of the Bid-cum-Application Form and for amounts payable
pursuant to allotment in the Issue.

Terms of Payment and Payment into the Escrow Accounts

Each Bidder shall draw a cheque or demand draft for the amount payable on the Bid and/ or on
allocation/ Allotment as per the following terms.

1.   Each category of Bidders i.e., QIB Bidders, Non-Institutional Bidders, Retail Individual Bidders shall
     provide the applicable Margin Amount, and with the submission of the Bid cum Application Form
     draw a cheque or demand draft for the maximum amount of his/ her Bid in favour of the Escrow
     Account of the Escrow Collection Bank(s) (for details refer to the paragraph titled “Terms of Payment
     and Payment into the Escrow Account” on page 170 of this Red Herring Prospectus) and submit the
     same to the member of the Syndicate to whom the Bid is being submitted. Bid cum Application
     Forms accompanied by cash shall not be accepted. The Margin Amount payable by each category of
     Bidders is mentioned under the section titled “Issue Structure” on page 155 of this Red Herring
     Prospectus. The maximum Bid Price has to be paid at the time of submission of the Bid cum
     Application Form based on the highest bidding option of the Bidder.

2.   Where the Margin Amount applicable to the Bidder is less than 100% of the Bid Price, any difference
     between the amount payable by the Bidder for Equity Shares allocated/ allotted at the Issue Price
     and the Margin Amount paid at the time of Bidding, shall be payable by the Bidder no later than the
     Pay-in –Date, which shall be a minimum period of 2 (two) days from the date of communication of
     the allocation list to the members of the Syndicate by the BRLM. If the payment is not made favoring
     the Escrow Account within the time stipulated above, the Bid of the Bidder is liable to be cancelled.

3.   The payment instruments for payment into the Escrow Account should be drawn in favour of:

     (a)   In case of Resident QIB Bidders:
     (b)   In case of Non Resident QIB Bidders:
     (c)   In case of Resident Retail and Non-Institutional Bidders:
     (d)    In case of Non Resident Retail and Non-Institutional Bidders:

4.   In case of Bids by Eligible NRIs applying on repatriation basis, the payments must be made through
     Indian Rupee drafts purchased abroad or cheques or bank drafts, for the amount payable on
     application remitted through normal banking channels or out of funds held in Non- Resident


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     External (NRE) Accounts or Foreign Currency Non-Resident (FCNR) Accounts, maintained with
     banks authorized to deal in foreign exchange in India, along with documentary evidence in support
     of the remittance. Payment will not be accepted out of Non-Resident Ordinary (NRO) Account of the
     Non-Resident Bidder bidding on a repatriation basis. Payment by drafts should be accompanied by
     bank certificate confirming that the draft has been issued by debiting to NRE or FCNR Account.

5.   In case of Bids by FIIs/ FVCIs registered with SEBI/ multilateral and bilateral financial
     institutions, the payment should be made out of funds held in special rupee account along with
     documentary evidence in support of the remittance. Payment by drafts should be accompanied by
     bank certificate confirming that the draft has been issued by debiting to special rupee account.

6.   Where a Bidder has been allocated/ Alloted a lesser number of Equity Shares than the Bidder has Bid
     for, the excess amount, if any, paid on bidding, after adjustment towards the balance amount payable
     on the Equity Shares allocated/Alloted will be refunded to the Bidder from the Refund Account.

7.   On the Designated Date, the Escrow Collection Banks shall transfer the funds from the Escrow
     Accounts as per the terms of the Escrow Agreement into the Issue Account with the Bankers to the
     Issue. No later than 15 days from the Bid/Issue Closing Date, the Escrow Collection Banks
     shall refund all amounts payable to unsuccessful Bidders and also the excess amount paid on
     Bidding, if any, after adjusting for allocation/ Allotment to the Bidders.

Payment by Stockinvest

In terms of the Reserve Bank of India Circular No. DBOD No. FSC BC 42/24.47.00/2003-04 dated
November 5, 2003, the option to use the stockinvest instrument in lieu of cheques or bank drafts for
payment of Bid money has been withdrawn. Hence, payment through stockinvest would not be accepted
in this Issue.

Submission of Bid cum Application Form

All Bid/cum Application Forms or Revision Forms duly completed and accompanied by account payee
cheques or drafts shall be submitted to the members of the Syndicate at the time of submission of the Bid.

Separate receipts shall not be issued for the money payable on the submission of Bid cum Application
Form or Revision Form. However, the collection centre of the members of the Syndicate will acknowledge
the receipt of the Bid cum Application Forms or Revision Forms by stamping and returning
to the Bidder the acknowledgement slip. This acknowledgement slip will serve as the duplicate of the
Bid cum Application Form for the records of the Bidder.

OTHER INSTRUCTIONS

Joint Bids in the case of Individuals

Bids may be made in single or joint names (not more than three). In the case of joint Bids, all refund
payments will be made out in favour of the Bidder whose name appears first in the Bid cum Application
Form or Revision Form. All communication will be addressed to the First Bidder and will be dispatched
to his or her address as per the Demographic Details received from the Depository.




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Multiple Bids

A Bidder should submit only one Bid (and not more than one) for the total number of Equity Shares
required. Two or more Bids will be deemed to be multiple Bids if the sole or First Bidder is one and the
same.

In this regard, the procedures which would be followed by the Registrar to the Issue to detect
multiple applications are given below:

1.   All applications with the same name and age will be accumulated and taken to a separate process file
     which would serve as a multiple master.

2.   In this master, a check will be carried out for the same PAN/GIR numbers. In cases where
     the PAN/GIR numbers are different, the same will be deleted from this master.

3.   The Registrar to the Issue will obtain, from the depositories, details of the applicant’s address based
     on the DP ID and Beneficiary Account Number provided in the Bid cum Application Form and create
     an address master.

4.   The addresses of all these applications in the multiple master will be strung from the address master.
     This involves putting the addresses in a single line after deleting non-alpha and non-numeric
     characters i.e. commas, full stops, hash etc. Sometimes, the name, the first line of address and pin
     code will be converted into a string for each application received and a photo match will be carried
     out amongst all the applications processed. A print-out of the addresses will be taken to check for
     common names. The applications with same name and same address will be treated as multiple
     applications.

5.   The applications will be scanned for similar DP ID and Beneficiary Account Numbers. In case
     applications bear the same DP ID and Beneficiary Account Numbers, these will be treated as multiple
     applications.

6.   Subsequent to the aforesaid procedures, a print out of the multiple master will be taken and the
     applications physically verified to tally signatures as also father’s/husband’s names. On completion
     of this, applications will finally be identified as multiple applications.

In case of a mutual fund, a separate Bid can be made in respect of each scheme of the mutual funds
registered with SEBI and such Bids in respect of more than one scheme of the mutual funds will not be
treated as multiple Bids provided that the Bids clearly indicate the scheme for which the Bid has been
made.

The Company, in consultation with the BRLM, reserves the right to reject, in its absolute discretion, all or
any multiple Bids in any or all categories.

Permanent Account Number or PAN

The Bidders, or in the case of a Bid in joint names, each of the Bidders, should mention his/her
Permanent Account Number (PAN) allotted under the I.T. Act. SEBI has issued a circular no.
MRD/DoP/Cir-05/2007 DATED April 27, 2007 requiring that with effect from July 2, 2007, the PAN
would be the sole identification number for participants transacting in the securities market, irrespective
of the amount of transaction. In case the PAN has not been allotted, mention “Applied for” or “Not
Applicable” in the appropriate places and submit Form 60 or Form 61 as the case may be together with
permissible documents as proof of address. Applications without this information and documents will be


                                                    173
considered incomplete and are liable to be rejected. It is to be specifically noted that Bidders should not
submit the GIR number instead of the PAN, as the Bid is liable to be rejected on this ground. In case
the sole/First Bidder and joint Bidder(s) is/are not required to obtain PAN, each of the Bidder(s) shall
mention “Not Applicable” and in the event that the sole Bidder and/or the joint Bidder(s) have applied
for PAN which has not yet been allotted each of the Bidder(s) should mention “Applied for” in
the Bid cum Application Form. Further, where the Bidder(s) has mentioned “Applied for” or “Not
Applicable”, the Sole/First Bidder and each of the Joint Bidder(s), as the case may be, would be
required to submit Form 60 (form of declaration to be filed by a person who does not have a
permanent account number and who enters into any transaction specified in Rule 114B of the Income Tax
Rules, 1962), or, Form 61 (form of declaration to be filed by a person who has agricultural income and is
not in receipt of any other income chargeable to income-tax in respect of transactions specified in Rule
114B of the Income Tax Rules, 1962), as may be applicable, duly filled along with a copy of any one of the
following documents in support of the address: (a) Ration Card (b) Passport (c) Driving License (d)
Identity Card issued by any institution (e) Copy of the electricity bill or telephone bill showing
residential address (f) Any document or communication issued by any authority of the Central
Government, State Government or local bodies showing residential address and (g) Any other
documentary evidence in support of address given in the declaration. It may be noted that Form 60 and
Form 61 have been amended vide a notification issued on December 1, 2004 by the Ministry of
Finance, Department of Revenue, Central Board of Direct Taxes. All Bidders are requested to
furnish, where applicable, the revised Form 60 or Form 61 as the case may be.

Our Right to Reject Bids

In case of QIB Bidders, the Company in consultation with the BRLM may reject Bids provided that the
reasons for rejecting the same shall be provided to such Bidder in writing. In case of Non-Institutional
Bidders and Retail Individual Bidders who Bid, the Company has a right to reject Bids based on technical
grounds. Consequent refunds shall be made as described in this Red Herring Prospectus and will be sent
to the Bidders’ address at the Bidders’ risk.

GROUNDS FOR TECHNICAL REJECTIONS

Bidders are advised to note that Bids are liable to be rejected inter alia on the following technical grounds:

a) Amount paid does not tally with the amount payable for the highest value of Equity Shares Bid for;
b) Bank account details (for refund) are not given;
c)   Age of First Bidder not given;
d) In case of partnership firms, Equity Shares may be registered in the names of the individual partners
   and no firm as such shall be entitled to apply;
e) Bids by persons not competent to contract under the Indian Contract Act, 1872 including minors and
   insane persons;
f)   PAN photocopy/ PAN communication/ Form 60 or Form 61 declaration along with documentary
     evidence in support of address given in the declaration not given;
g) GIR number furnished instead of PAN;
h) Bids for lower number of Equity Shares than specified for that category of investors;
i)   Bids at a price less than lower end of the Price Band;
j)   Bids at a price more than the higher end of the Price Band;
k) Bids at Cut-off Price by Non-Institutional and QIB Bidders whose Bid Amount exceeds
   Rs.100,000;
l)   Bids for number of Equity Shares, which are not in multiples of [●];



                                                     174
m) Category not ticked;
n) Multiple Bids as defined in this Red Herring Prospectus;
o) In case of Bid under power of attorney or by limited companies, corporate, trust etc., relevant
   documents are not submitted;
p) Bids accompanied by Stockinvest/ money order/postal order/cash;
q) Signature of sole and/or joint Bidders missing;
r)   Bid cum Application Form does not have the stamp of the BRLM or the Syndicate Members;
s)   Bid cum Application Form does not have the Bidder’s depository account details;
t)   Bid cum Application Form is not delivered by the Bidder within the time prescribed as per the Bid
     cum Application Forms, Bid/ Issue Opening Date advertisement and the Red Herring Prospectus
     and as per the instructions in this Red Herring Prospectus and the Bid cum Application Forms;
u) In case no corresponding record is available with the Depositories that matches three parameters
   namely, names of the Bidders (including the order of names of joint holders), the Depository
   Participant’s identity (DP ID) and the beneficiary’s account number;
v) Bids for amounts greater than the maximum permissible amounts prescribed by the regulations;
w) Bids by QIBs not submitted through members of the Syndicate;
x) Bids by OCBs;
y) Bids by U.S. persons, other than “qualified institutional buyers” as defined in Rule 144A under the
   Securities Act or other than in reliance on Regulation S under the Securities Act; and
z) Bids by persons outside India if not in compliance with applicable foreign and Indian laws or by any
   persons who are not eligible to acquire Equity Shares of our Company, in terms of all applicable laws,
   rules, regulations, guidelines and approvals.


Equity Shares in Dematerialized Form with NSDL or CDSL


As per the provisions of Section 60B of the Companies Act, the Allotment of Equity Shares in this Issue
shall be only in a dematerialized form (i.e., not in the form of physical certificates but the fungible and be
represented by the statement issued through the electronic mode).


In this context, two agreements have been signed among the Company, the respective Depositories and
the Registrar to the Issue:


a) Agreement dated [●] with NSDL, the Company and the Registrar to the Issue;
b) Agreement dated [●] with CDSL, the Company and the Registrar to the Issue.


All bidders can seek Allotment only in dematerialized mode. Bids from any Bidder without relevant
details of his or her depository account are liable to be rejected.


a) A bidder applying for Equity Shares must have at least one beneficiary account with either of the
   Depository Participant of either NSDL or CDSL prior to making the Bid.
b) The Bidder must necessarily fill in the details (including the Beneficiary Account Number and
   Depository Participant’s identification number) appearing in the Bid-cum-Application Form or
   Revision Form.
c)   Allotment to a successful Bidder will be credited in electronic form directly to the beneficiary account
     (with the Depository Participant) of the Bidder.



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d)    Names in the Bid-cum-Application Form or Revision Form should be identical to those appearing in
     the account details in the Depository. In case of joint holders, the names should necessarily be in the
     same sequence as they appear in the account details in the Depository.
e) If incomplete or incorrect details are given under the heading ‘Bidders Depository Account Details’ in
   the Bid-cum-Application Form or Revision Form, it is liable to be rejected.
f)   The Bidder is responsible for the correctness of his or her Demographic details given in the Bid-cum-
     Application Form vis-à-vis those with his or her Depository Participant.
g) Equity Shares in electronic form can be traded only on the stock exchanges having electronic
   connectivity with NSDL or CDSL. All the Stock Exchanges where our Equity Shares are proposed to
   be listed have electronic connectivity with NSDL and CDSL.
h) The trading of the Equity Shares of the Company would be in dematerialized form only for all
   investors in the demat segment of the respective Stock Exchanges.


DISPOSAL OF APPLICATIONS AND APPLICATION MONEYS AND INTEREST IN CASE OF
DELAY

We shall ensure dispatch of Allotment advice, refund orders (except for Bidders who receive refunds
through electronic transfer of funds) and give benefit to the beneficiary account with Depository
Participants and submit the documents pertaining to the Allotment to the Stock Exchanges within
15 working days of the Bid/ Issue Closing Date.

In case of applicants who receive refunds through ECS, direct credit or RTGS, the refund instructions will
be given to the clearing system within 15 days from the Bid/ Issue Closing Date. A suitable
communication shall be sent to the bidders receiving refunds through this mode within 15 days of Bid/
Closing Date, giving details of the bank where refunds shall be credited along with amount and expected
date of electronic credit of refund.

The Company shall use best efforts to ensure that all steps for completion of the necessary formalities for
listing and commencement of trading at all the Stock Exchanges where the Equity Shares are proposed to
be listed are taken within seven working days of Allotment.

In accordance with the requirements of the Stock Exchanges and the SEBI Guidelines, the Company
further undertakes that:

      Allotment of Equity Shares shall be made only in DEMATERIALIZED form within 15 (fifteen)
      working days of the Bid/Issue Closing Date;
      Dispatch of refund orders or in case where the refund or portion thereof is made in electronic
      manner, the refund instructions are given to the clearing system within 15 (fifteen) working days of
      the Bid/Issue Closing Date would be ensured; and
      The Company shall pay interest at 15% (fifteen) per annum for any delay beyond the 15 (fifteen)
      day time period as mentioned above, if Allotment is not made and refund orders are not dispatched
      or if, in a case where the refund or portion thereof is made in electronic manner, the refund
      instructions have not been given to the clearing system in the disclosed manner and/ or demat
      credits are not made to investors within the 15 (fifteen) days time prescribed above as per the
      guidelines issued by the Government of India, Ministry of Finance pursuant to their letter No.
      F/8/S/79 dated July 31, 1983, as amended by their letter no. F/14/SE/85 dated September 27, 1985,
      addressed to the stock exchanges, and as further modified by SEBI’s Clarification XXI dated
      October 27, 1997, with respect to the SEBI Guidelines.




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Interest on refund of excess Bid Amount
The Company shall pay interest at the rate of 15% per annum on the excess Bid Amount received if
refund orders are not dispatched within 15 working days from the Bid/Issue Closing Date.


BASIS OF ALLOTMENT

A. For Retail Individual Bidders

     Bids received from the Retail Individual Bidders at or above the Issue Price shall be grouped
     together to determine the total demand under this category. The Allotment to all the successful
     Retail Individual Bidders will be made at the Issue Price.
     The Net Issue size less Allotment to Non-Institutional and QIB Bidders shall be available for
     Allotment to Retail Individual Bidders who have bid in the Issue at a price that is equal to or greater
     than the Issue Price.
     If the aggregate demand in this category is less than or equal to [●] Equity Shares at or above the
     Issue Price, full Allotment shall be made to the Retail Individual Bidders to the extent of their valid
     Bids.
     If the aggregate demand in this category is greater than [●] Equity Shares at or above the Issue
     Price, the Allotment shall be made on a proportionate basis up to a minimum of [●] Equity Shares.
     For the method of proportionate basis of Allotment, refer below.


B. For Non-Institutional Bidders

     Bids received from Non-Institutional Bidders at or above the Issue Price shall be grouped together
     to determine the total demand under this category. The Allotment to all successful Non-
     Institutional Bidders will be made at the Issue Price.
     The Net Issue size less Allotment to QIBs and Retail Portion shall be available for Allotment to
     Non-Institutional Bidders who have bid in the Issue at a price that is equal to or greater than the
     Issue Price.
     If the aggregate demand in this category is less than or equal to [●] Equity Shares at or above the
     Issue Price, full Allotment shall be made to Non-Institutional Bidders to the extent of their demand.
     In case the aggregate demand in this category is greater than [●] Equity Shares at or above the Issue
     Price, Allotment shall be made on a proportionate basis up to a minimum of [●] Equity Shares. For
     the method of proportionate basis of allotment, refer below.

C. For QIB Bidders


     Bids received from the QIB Bidders at or above the Issue Price shall be grouped together to
     determine the total demand under this portion. The Allotment to all the QIB Bidders will be made
     at the Issue Price.
     The QIB Portion shall be available for Allotment to QIB Bidders who have bid in the Issue at a price
     that is equal to or greater than the Issue Price.
     Allotment shall be undertaken in the following manner:

     (a) In the first instance allocation to Mutual Funds for up to 5% of the QIB Portion shall be
         determined as follows:


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          (i)   In the event that Mutual Fund Bids exceeds 5% of the QIB Portion, allocation to
                Mutual Funds shall be done on a proportionate basis for up to 5% of the QIB Portion.
          (ii) In the event that the aggregate demand from Mutual Funds is less than 5% of the
                QIB Portion, then all Mutual Funds shall get full Allotment to the extent of valid bids
                received above the Issue Price.
          (iii) Equity Shares remaining unsubscribed, if any, not allocated to Mutual Funds shall
                be available to all QIB Bidders as set out in (b) below;

     (b) In the second instance, Allotment to all QIBs shall be determined as follows:

          (i)   In the event that the oversubscription in the QIB Portion, all QIB Bidders who have
                submitted Bids above the Issue Price shall be Allotted Equity Shares on a proportionate
                basis for upto 95% of the QIB Portion.
          (ii) Mutual Funds, who have received allocation as per (a) above, for less than the number of
                Equity Shares Bid for by them, are eligible to receive Equity Shares on a proportionate
                basis along with other QIB Bidders.
          (iii) Under-subscription below 5% of the QIB Portion, if any, from Mutual Funds, would be
                included for allocation to the remaining QIB Bidders on a proportionate basis.

     The aggregate Allotment to QIB Bidders shall be upto [●] Equity Shares.

Method of Proportionate Basis of Allotment in the Issue

In the event the Issue is over-subscribed, the basis of Allotment shall be finalized by the
Company in consultation with the Designated Stock Exchange. The Executive Director (or any other
senior official nominated by them) of the Designated Stock Exchange along with the BRLM and the
Registrar to the Issue shall be responsible for ensuring that basis of allotment is finalized in a fair and
proper manner.

The Allotment shall be made in marketable lots, on a proportionate basis as explained below:

(a) Bidders will be categorized according to the number of Equity Shares applied for by them.
(b) The total number of Equity Shares to be allotted to each category as a whole shall be arrived at on a
    proportionate basis, which is the total number of Equity Shares applied for in that category (number
    of Bidders in the category multiplied by the number of Equity Shares applied for) multiplied by the
    inverse of the over-subscription ratio.
(c) Number of Equity Shares to be allotted to the successful Bidders will be arrived at on a proportionate
    basis, which is total number of Equity Shares applied for by each Bidder in that category multiplied
    by the inverse of the over-subscription ratio.
(d) In all Bids where the proportionate Allotment is less than [●] Equity Shares per Bidder, the Allotment
    shall be made as follows:

        The successful Bidders out of the total Bidders for a category shall be determined by draw of lots
        in a manner such that the total number of Equity Shares Allotted in that portion is equal to the
        number of Equity Shares calculated in accordance with (b) above; and
        Each successful Bidder shall be allotted a minimum of [●] Equity Shares.

(e) If the proportionate Allotment to a Bidder is a number that is more than [●] but is not a multiple of
    one (which is the market lot), the decimal would be rounded off to the higher whole number if that



                                                   178
     decimal is 0.5 or higher. If that number is lower than 0.5, it would be rounded off to the
     lower whole number. Allotment to all Bidders in such categories would be arrived at after such
     rounding off.
(f) If the Equity Shares allocated on a proportionate basis to any category are more than the
    Equity Shares Allotted to the Bidders in that category, the remaining Equity Shares available
    for Allotment shall be first adjusted against any other category, where the Allotted shares are not
    sufficient for proportionate Allotment to the successful Bidders in that category. The balance Equity
    Shares, if any, remaining after such adjustment will be added to the category comprising Bidders
    applying for minimum number of Equity Shares.


PAYMENT OF REFUND

Bidders must note that on the basis of name of the Bidders, Depository Participant’s name,
Depository Participant-Identification number and Beneficiary Account Number provided by them
in the Bid cum Application Form, the Registrar will obtain from the Depositories, the Bidders’ bank
account details including nine digit MICR code as appearing on a cheque leaf. Hence, Bidders are advised
to immediately update their bank account details as appearing on the records of the Depository
Participant. Please note that failure to do so could result in delays in despatch of refund order or refunds
through electronic transfer of funds, as applicable, and any such delay shall be at the Bidders’ sole risk
and neither the Bank, the Registrar, Escrow Collection Bank(s), Bankers to the Issue nor the BRLMs shall
be liable to compensate the Bidders for any losses caused to the Bidder due to any such delay or liable to
pay any interest for such delay.

Mode of making refunds

The payment of refund, if any, would be done through various modes in the following order of
preference:

I    ECS - Payment of refund would be done through ECS for applicants having an account at any
     of the following fifteen centres: Ahmedabad, Bangalore, Bhuvaneshwar, Kolkata, Chandigarh,
     Chennai, Guwahati, Hyderabad, Jaipur, Kanpur, Mumbai, Nagpur, New Delhi, Patna and
     Thiruvananthapuram. This mode of payment or refunds would be subject to availability of
     complete Bank Account Details including the MICR code as appearing on a cheque leaf, from the
     Depositories. The payment of refunds through ECS is mandatory for applicants having a bank
     account at any of the above mentioned fifiteen centres, except where the applicant, being eligible,
     opts to receive refund through NEFT, direct credit or RTGS.

II   Direct Credit – Applicants having bank accounts with the Refund Banker(s), as mentioned in the bid
     cum Application Form, shall be eligible to receive refunds through direct credit. Charges, if any,
     levied by the Refund Bank(s) for the same would be borne by the Bank.

III RTGS – Applicants having a bank account at any of the above mentioned fifteen centres and whose
    refund amount exceeds Rs. 1 million, have the option to receive refund through RTGS. Such eligible
    applicants who indicate their preference to receive refund through RTGS are required to provide the
    IFSC code in the Bid-cum-application Form. In the event the same is not provided, refund shall be
    made through ECS. Charges, if any, levied by the Refund Bank(s) for the same would be borne by the
    Bank. Charges, if any, levied by the applicant’s bank receiving the credit would be borne by the
    applicant.

IV NEFT (National Electronic Fund Transfer) – Payment of refund shall be undertaken through NEFT
   wherever the applicants’ bank has been assigned the Indian Financial System Code (IFSC), which can


                                                    179
    be linked to a MICR, if any, available to that particular bank branch. IFSC Code will be obtained from
    the website of RBI as on date immediately prior to the date of payment of refund, duly mapped with
    MICR numbers. Whenever the applicants have registered their nine digit MICR number and their
    bank account number while opening and operating the demat account, the same will be duly mapped
    with the IFSC Code of that particular bank branch and the payment of refund will be made to the
    applicants through this method. The process flow in respect of refunds by way of NEFT is at an
    evolving stage and hence use of NEFT is subject to operational feasibility, cost and process efficiency.

V   For all other applicants, including those who have not updated their bank particulars with the MICR
    code, the refund orders will be dispatched “Under Certificate of Posting” for value upto Rs. 1,500 and
    through Speed Post/Registered Post for refund orders of Rs. 1500 and above. Such refunds will be
    made by cheques, pay orders or demand drafts drawn on the Escrow Collection Banks and payable at
    par at places where Bids are received. Bank charges, if any, for cashing such cheques, pay orders or
    demand drafts at other centres will be payable by the Bidders.

UNDERTAKINGS BY THE COMPANY

We undertake as follows:

     That the complaints received in respect of this Issue shall be attended to by us
     expeditiously;
     That all steps will be taken for the completion of the necessary formalities for listing
     and commencement of trading at all the Stock Exchanges where the Equity Shares are proposed to
     be listed within seven working days of finalization of the basis of Allotment;
     That funds required for making refunds to unsuccessful applicants as per the mode(s) disclosed
     shall be made available to the Registrar to the Issue by the Issuer;
     That where refunds are made through electronic transfer of funds, a suitable communication shall
     be sent to the applicant within 15 working days of the Bid/ Issue Closing Date, as the case may be,
     giving details of the bank where refunds shall be credited along with amount and expected date of
     electronic credit of refund;
     That the certificates of the securities/ refund orders to the Non-Resident Indians shall be dispatched
     within specified time; and
     That no further issue of capital whether by way of issue of bonus shares, preferential allotment,
     rights issue or in any other manner shall be made until the Equity Shares offered through this Red
     Herring Prospectus are listed or until the Bid monies are refunded on account of non-
     listing, under-subscription etc.

The Company shall not have recourse to the Issue proceeds until the approval for trading of the Equity
Shares from all the Stock Exchanges where listing is sought has been received.

Utilization of Issue proceeds

The Company shall not have any recourse to the Issue proceeds until the approval for trading the Equity
Shares is received from the Stock Exchanges.




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                   IX. MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION

Terms used ‘Bold’ in this section have the meaning given to such terms in the Articles of the Company.

Pursuant to Schedule II of the Companies Act, 1956 and the SEBI DIP Guidelines, the main provisions of
the Articles of Association of the Company relating to voting rights, dividend, lien, forfeiture, restrictions
on transfer and transmission of Equity Shares and or their consolidation/ splitting are detailed below.
(the numbers represent Article Number as mentioned in Articles of Association)

Share Capital

3.      The Authorised Share Capital of the Company is as mentioned in Clause V of the Memorandum
        of Association of the Company, with power to increase or reduce the Authorised Share Capital
        and to divide the Shares in the Capital for the time being, into several classes and to attach
        thereto respectively such special rights, privileges or conditions and to modify, vary any such
        rights, privileges or conditions.

4.      Subject to the provisions of section 80, any preference shares may, with the sanction of an
        ordinary resolution, be issued on the terms that they are, or at the option of the Company are
        liable, to be redeemed on such terms and in such manner as the Company before the issue of the
        shares may, by special resolution, determine.

5.     (1)      If at any time the Share Capital is divided into different classes of shares, the rights
                attached to any class (unless otherwise provided by the terms of issue of the shares of
                that class) may, subject to the provisions of sections 106 and 107, and whether or not the
                company is being wound-up, be varied with the consent in writing of the holders of
                three-fourths of the issued shares of that class, or with the sanction of a special resolution
                passed at a separate meeting of the holders of the shares of that class.

        (2)     To every such separate meeting, the provisions of these regulations relating to general
                meetings shall mutatis mutandis apply, but so that the necessary quorum shall be two
                persons at least holding or representing by proxy one-third of the issued shares of the
                class in question.

6.      The rights conferred upon the holders of the shares of any class issued with preferred or other
        right shall not, unless otherwise expressly provided by the terms of issue of the shares of that
        class, be deemed to be varied by the creation or issue of further shares ranking pari passu
        therewith.

Alteration of Capital

7.      The Company may, from time to time, by ordinary resolution increase its Share Capital by such
        sum, to be divided into Shares of such amount, as it thinks fit.

8.      The Company may, by ordinary resolution in general meeting.
        (a)   consolidate and divide all or any of its capital into Shares of larger amounts than its
              existing Shares;
        (b)   sub-divide its Shares or any of them, into Shares of smaller amounts than is fixed by the
              Memorandum of Association, so however, than in the subdivision the proportion
              between the amount paid and the amount, if any, unpaid on each reduced share shall be
              the same as it was in the case of share from which the reduced share is derived.



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       (c)     Cancel any share which, at the date of the passing of the resolution in that behalf, have
               not been taken or agreed to be taken by any person and diminish the amount of its
               Shares so cancelled.

9.     The Company may, from time to time, by special resolution and on compliance with the
       provisions of Section 100 to 105 of the Act, reduce its share capital and any capital reserve and/or
       share premium account.

Further Issue of Shares

10.    (1)     Where a t the ti me af ter the expiry of two yea rs from the
               formation of the Company or at any time after the expiry of one year from the allotment
               of Shares in the Company made for the first time after its formation, whichever is earlier,
               it is proposed to increase the subscribed capital of the Company by allotment of further
               Shares either out of the un-issued capital or out of the increased share capital then:
               (a)      such further Shares shall be offered to the persons who at the date of the offer,
                        are holders of the equity Shares of the Company, in proportion, as near as
                        circumstances admit, to the capital paid up on those Shares at the date.
               (b)      such offer shall be made by a notice specifying the number of Shares offered and
                        limiting a time not less than thirty days from the date of the offer and the offer if
                        not accepted, will be deemed to have been declined.
               (c)      the offer aforesaid shall be deemed to include a right exercisable by the person
                        concerned to renounce the Shares offered to them in favour of any other person
                        and the notice referred to in sub clause (b) hereof shall contain a statement of this
                        right. Provided that the Directors may decline, without assigning any reason to
                        allot any Shares to any person in whose favour any member may renounce the
                        Shares offered to him.
               (d)      after expiry of the time specified in the aforesaid notice or on receipt of earlier
                        intimation from the person to whom such notice is given that he declines to
                        accept the Shares offered, the Board of Directors may dispose off them in such
                        manner and to such person(s) as they may think fit, in their sole discretion.

       (2)     Notwithstanding anything contained in sub-clause (1) thereof, the further Shares
               aforesaid may be offered to any persons (whether or not those persons include the
               persons referred to in clause (a) of sub-clause (1) hereof) in any manner whatsoever.
               (a)     if special resolution to that effect is passed by the Company in General Meeting,
                       or
               (b)     where no such special resolution is passed, if the votes cast (whether on a show
                       of hands or on a poll as the case may be) in favour of the proposal contained in
                       the resolution moved in the General Meeting (including the casting vote, if any,
                       of the Chairman) by the members who, being entitled to do so, vote in person, or
                       where proxies are allowed, by proxy, exceed the votes, if any, cast against the
                       proposal by members, so entitled and voting and the Central Government is
                       satisfied, on an application made by the Board of Directors in this behalf that the
                       proposal is most beneficial to the Company.

       (3)     Nothing in sub-clause (c) of clause (1) hereof shall be deemed;
               (a)    To extend the time within which the offer should be accepted; or
               (b)    To authorise any person to exercise the right of renunciation for a second time on
                      the ground that the person in whose favour the renunciation was first made has
                      declined to take the Shares comprised in the renunciation.




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      (4)     Nothing in this Article shall apply to the increase of the subscribed capital of the
              Company caused by the exercise of an option attached to the Debenture issued or loans
              raised by the Company :
              (a)     to convert such Debentures or loans into Shares in the Company; or
              (b)     to subscribe for Shares in the Company (whether such option is conferred in
                      these Articles or otherwise).

              Provided that the terms of issue of such Debentures or the terms of such loans include a
              term providing for such option and such term :
              (i)    either has been approved by the Central Government before the
                     issue of the debentures or the raising of the loans or is in conformity with Rules,
                     if any, made by that Government in this behalf; and
              (ii)   In the case of Debentures or loans or other than Debentures issued to or loans
                     obtained from Government or any institution specified by the Central
                     Government in this behalf, has also been approved by a special resolution passed
                     by the Company in General Meeting before the issue of the Debentures or raising
                     of the loans.

11.   Subject to the provisions of Section 81 of the Act and these Articles, the Shares in the Capital of
      the Company for the time being shall be under the control of the Directors who may issue, allot
      or otherwise dispose off the same or any of them to such persons, in such proportion and on such
      terms and conditions and either at a premium or at par or (subject to the compliance with the
      provisions of section 79 of the Act) at a discount and at such time as they may from time to time
      think fit and with the sanction of the Company in the General Meeting to give to any person or
      persons the option or right to call for any Shares either at par or premium during such time and
      for such consideration as the Directors think fit, and may issue and allot Shares in the capital of
      the Company on payment in full or part of any property sold and transferred or for any services
      rendered to the Company in the conduct of its business and any Shares which may so be allotted
      may be issued as fully paid up Shares and if so issued, shall be deemed to be fully paid Shares.
      Provided that option or right to call of Shares shall not be given to any person or persons without
      the sanction of the Company in the General Meeting.

12.   Any Debenture, Debenture-stock or other securities may be issued at a discount, premium or
      otherwise and may be issued on condition that they shall be convertible into Shares of any
      denomination and with any privileges and conditions as to redemption, surrender, drawing,
      allotment of Shares, attending (but not voting) at the General Meeting, appointment of Directors
      and otherwise Debentures with the right to conversion into or allotment of Shares shall be issued
      only with the consent of the Company in the General Meeting by a Special Resolution.

13.   The Company may issue Shares/options/warrants/Debentures whether fully or partly
      convertible or any other financial instruments which would be convertible into or exchanged
      with equity Shares at a later date on preferential basis to person(s) other than existing
      shareholders and/or through private placement in pursuance of section 81(1A) of the Companies
      Act, 1956 including issue of Shares to the promoters and their relatives either in public issue or
      otherwise.

14.   The Share Premium Account may be applied by the Company:
      (a)    in paying up un-issued Shares of the Company to be issued to members of the Company
             as fully paid-up Bonus Shares.
      (b)    in writing off the preliminary expenses of the Company.
      (c)    in writing off the expenses of, or the commission paid or discount allowed on, any issue
             of Shares or Debentures of the Company; or


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        (d)     in providing for the premium payable on the redemption of any Redeemable Preference
                Shares or any Debentures of the Company.

Buy Back of Shares

20.    The Company shall have power, subject to and in accordance with the provisions of Sections 77A,
       77AA and 77B of the Act and other relevant regulations including regulations laid down by
       Securities and Exchange Board of India (SEBI) in this regard from time-to-time, to purchase any
       of its Shares or such other specified securities as may be notified by the Central Government from
       time to time, on such terms and conditions and in such manner as may be prescribed by law from
       time to time.
Conversion of Shares into Stock

21.     The Company may, by ordinary resolution :-
        (a)   convert any paid-up Shares into stock; and
        (b)   reconvert any stock into paid-up Shares of any denomination authorised by these
              regulations.

22.     The holders of stock may transfer the same or any part thereof in the same manner as, and subject
        to the same regulations under which, the Shares from which the stock arose might before the
        conversion have been transferred or as near thereto as circumstances admit; provided the Board
        may from time to time, fix the minimum amount of stock transferable, so, however, that such
        minimum shall not exceed the nominal amount of the Shares from which the stock arose.

23.     The holders of stock shall, according to the amount of stock held by them, have the same rights,
        privileges and advantages as regard Dividends voting at meeting of the Company, and other
        matters, as if they held the Shares from which the stock arose; but no such privileges or
        advantage (except participation in the Dividend s and profits of the Company and in the assets
        on winding up) shall be conferred by any amount of stock which would not if existing in Shares,
        have conferred that privilege or advantage.

24.     Such of the regulations of the Company (other than those relating to share warrants) as are
        applicable to paid-up Shares shall apply to stock and the words “share” and “shareholders” in
        those regulations shall include “stock” and “stockholder” respectively.
Lien

40.     The Company shall have a first and paramount lien upon all the Shares/Debentures (other than
        fully paid-up Shares/Debentures) registered in the name of each member (whether solely or
        jointly with others) and upon the proceeds of sale thereof for all moneys (whether presently
        payable or not) called or payable at a fixed time in respect of such Shares/Debentures and no
        equitable interest in any share shall be created except upon the footing and condition that this
        Article will have full effect. And such lien shall extend to all Dividends and bonuses from time to
        time declared in respect of such Shares/Debentures. Unless otherwise agreed the registration of
        transfer of shares/debentures shall operate as a waiver of the Company’s lien, if any, on such
        shares/debentures. The Directors may at any time declare any Shares/Debentures wholly or in
        part to be exempt from the provisions of this clause. Notwithstanding anything contained
        hereinabove, Company shall have lien on fully paid-up Shares or Debentures and such lien shall
        extend only in respect of payment of excess Dividend / interest or any sums owing to the
        Company by a Member/Debenture holder.

         In the case of partly paid Shares/Debentures the Issuer’s lien shall be restricted to moneys called
         or payable at a fixed time in respect of such shares


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42.     (1)     The Company may sell, in such manner as the Board thinks fit, any share
                on which the Company has a lien provided that no sale shall be made:-
                (a)    unless a sum in respect of which the lien exists is presently payable : or
                (b)    until the expiration of fourteen days after a notice in writing demanding
                       payment of such part of the amount in respect of which the lien exists as is
                       presently payable, have been given to the registered holder for the time being
                       of the share or the person entitled thereto by reason of his death or
                       insolvency and stating that amount so demanded if not paid within the period
                       specified at the Registered Office of the Company the said Shares shall be
                       sold.
                (c)    To give effect to any such sale, the Board may authorise some person to
                       transfer the Shares sold to the purchaser thereof.
                (d)    The purchaser shall be registered as the shareholder of the Shares comprised in
                       any such transfer.
                (e)    The purchaser shall not be bound to see to the application of the purchase
                       money, nor shall his title to the share be affected by any irregularity or
                       invalidity in the proceedings in reference to the sale.

        (2)     The proceeds of the sale shall be received by the Company and applied in payment of
                the whole or a part of the amount in respect of which the lien exist as is presently
                payable.

       (3)     The residue, if any, shall, subject to a like lien for sums not presently payable as existed
               upon the Shares at the date of sale, be paid to the person entitled to the Shares at the
               date of the sale.
Transfer and Transmission of Shares

43.     The Company shall keep a “Register of Transfers” and therein shall fairly and distinctly enter
        particulars of every transfer or transmissions of any share.

44.     The instrument of transfer shall be in writing and all the provisions of section 108 of the Act shall
        be duly complied with in respect of all transfer of shares and registration thereof.

45.     (1)     The instrument of transfer of any share in the Company shall be executed
                by or on behalf of both the transferor and the transferee.

        The transferor shall be deemed to remain a holder of the share until the name of the transferee is
                entered in the Register of Members in respect thereof.

46.     Subject to the provisions of Section 111A of the Act and section 22A of the Securities Contracts
        (Regulation) Act, 1956, the Directors may by giving reasons, decline to register or acknowledge
        any transfer of Shares whether fully paid or not and the right of refusal, shall not be affected by
        the circumstances that the proposed transferee is already a member of the Company but in such
        cases, the Directors shall within one month from the date on which the instrument of transfer was
        lodged with the Company, send to the transferee and transferor notice of the refusal to register
        such transfer provided that registration of transfer shall not be refused on the ground of the
        transferor being either alone or jointly with any other person or persons indebted to the
        Company on any account whatsoever except when the Company has a lien on the shares.

47.     The   Board may also decline to recognize any instrument of transfer                         unless:-
        (a)    the instrument of transfer is accompanied by the certificate of the Shares


                                                    185
              to which it relates, and such other evidence as the Board may reasonably require to show
              the right of the transferor to make the transfer; and
      (b)     the instrument is in respect of only one class of Shares:

48.   All instruments of transfer which shall be registered shall be retained by the Company, but may
      be destroyed upon the expiration of such period as the Board may from time to time determine.
      Any instrument of transfer which the Board declines to register shall (except in any case of fraud)
      be returned to the person depositing the same.

49.   The registration or transfers may be suspended at such times and for such periods as the Board
      may, from time to time determine, provided that such registration shall not be suspended for
      more than forty-five days in the aggregate in any year or for more than thirty days at any one
      time unless the applicable law provides otherwise.

50    No fee shall be charged for registration of transfer, transmission, Probate, succession Certificate
      and Letters of administration, Certificate of Death or Marriage, Power of Attorney or similar
      other document.

51.   (1)     On the death of a member, the survivor or survivors where the member
              was a joint holder and his legal representative where he was a sole holder shall be the
              only person recognized by the Company as having any title to his interest in the Shares.

      (2)     Nothing in sub-clause (1) hereof shall release the estate of a deceased joint holder from
              any liability in respect of any share which had been jointly held by him with other
              person.

52.   (1)     Any person becoming entitled to a share in consequence of the death or
              insolvency of a member may, upon such evidence being produced as may from time to
              time properly be required by the Board and subject as hereinafter provided elect, either-
              (a)     to be registered himself as holder of the share; or
              (b)     to make such transfer of the Shares as the deceased or insolvent member could
                      have made.

      (2)     The Board shall, in either case, have the same right to decline or suspend registration as it
              would have had, if the deceased or insolvent member had himself transferred the share
              before his death or insolvency.

      (3)     If the person so becoming entitled, shall elect to be registered as holder of
              the share himself, he shall deliver or send to the Company a notice in writing signed by
              him stating that he so elects.

      (4)     If the person aforesaid shall elect to transfer the share, he shall testify his election by
              executing a transfer of the share.

      (5)     All the limitations, restrictions and provisions of these regulations relating to the right to
              transfer and the registration of transfers of Shares shall be applicable to any such notice
              or transfer as aforesaid as if the death or insolvency of the member had not occurred and
              the notice of transfer were a transfer signed by that member.

53.   On the transfer of the share being registered in his name a person becoming entitled to share by
      reason of death or insolvency of the holder shall be entitled to the same Dividends and other
      advantages to which he would be entitled if he was the registered holder of the share and that he


                                                  186
       shall not, before being registered as a member in respect of the share, be entitled in respect of it to
       exercise any right conferred by membership in relation to meeting of the Company.

       Provided that the Board may, at any time, give notice requiring any such person to elect either to
       be registered himself or to transfer the share and if the notice is not complied with within sixty
       days, the Board may thereafter withhold payment of all Dividends , bonus or other moneys
       payable in respect of the share, until the requirements of the notice have been complied with.

54.    A person entitled to share by transmission shall, subject to the right of the Directors to retain such
       Dividends, Bonuses or moneys as hereinafter provided be entitled to receive, and may give a
       discharge for any Dividends, Bonuses or other moneys payable in respect of the Share
       /Debenture.
           This Article shall not prejudice the provisions of in Articles relating to lien and forfeiture.

55.    The Directors shall have the same right to refuse to register a person entitled by transmission to
       any shares or his nominee as if he was the transferee named in the any ordinary transfer
       presented for registration.

Nomination

56.    Every holder of share(s) in and/or Debenture(s) of the Company, so entitled under the Act and
       Rules framed there under, may, at any time, in the manner prescribed under the Act, nominate a
       person to whom his share(s) in and/or Debenture(s) of the Company shall vest in the event of his
       death.

57.    Where the share(s) in and/or Debenture(s) of the Company are held by more than one person
       jointly, the joint-holders, so entitled under the Act and Rules framed there under, may together
       nominate, in the manner prescribed under the Act, a person to whom all the rights in the share(s)
       and/or Debenture(s) of the Company, as the case may be, shall vest in the event of death of all
       the joint-holders.

58.    Notwithstanding anything contained in any other law for the time being in force or in these
       Articles or in any disposition, whether testamentary or otherwise, in respect of the share(s)
       and/or Debenture(s) of the Company, where a nomination made in the manner prescribed under
       the Act, purports to confer on any person the rights to vest the share(s) and/or Debenture(s) of
       the Company, the nominee shall, on the death of the share-holder and/or Debenture holder
       concerned or on the death of the joint-holders, as the case may be, become entitled to all the
       rights in relation to such share(s) and/or Debenture(s), to the exclusion of all other persons,
       unless the nomination is varied or cancelled in the manner prescribed under the Act.

59.    Where the nominee is a minor, the holder of the share(s) and/or Debenture(s) of the Company
       can make a nomination in the manner prescribed under the Act, to appoint any person to become
       entitled to the share(s) and/or Debenture(s) of the Company, in the event of his death, during the
       minority.

Transmission in case of Nomination

60.    Notwithstanding anything contained in these Articles, any person who becomes a nominee by
       virtue of the provision of Articles hereof, upon the production of such evidence as may be
       required by the Board and subject as hereinafter provided, elect, either:
       (a)     to be registered himself a holder of the share(s) and/or Debenture(s), as the case may be;
               or


                                                    187
       (b)     to make such transfer of the share(s) and/or Debenture(s), as the case may be, as the
               deceased shareholder and/or Debenture holder concerned or deceased joint-holders, as
               the case may be, could have made.

61.    If the person being a nominee, so becoming entitled, elects himself to be registered as holder of
       the share(s) and/or Debenture(s), as the case may be, he shall deliver or send to the Company, a
       notice in writing duly signed by him stating that the nominee concerned so elects and such notice
       shall be accompanied with the death certificate(s) of the deceased share-holder/Debenture-
       holder/joint holders, as the case may be.

62.    All the limitations, restrictions and provisions of these Articles, relating to the right to the transfer
       and the registration of transfer of share(s) and/or Debenture(s), shall be applicable to any such
       notice or the transfer as aforesaid as if the death of the shareholder/Debenture-holder had not
       occurred and the notices or transfer were signed by that shareholder Debenture holder or joint-
       holders, as the case may be.

63.    A person being a nominee, becoming entitled to the share(s) and/or Debenture(s), by reason of
       the death of the holder shall be entitled to the same Dividend s and other advantages to which
       he would be entitled if he were the registered holder of the share(s) and/or Debenture(s), except
       that he shall not, before being registered a member in respect of his share(s) and/or Debenture(s)
       be entitled in respect of it to exercise any right conferred by membership in relation to a meeting
       of the Company.

      Provided that the Board may, at any time give notice requiring any such person to elect either to
      be registered himself or to transfer the share(s) and/or Debenture(s); and if the notice is not
      complied with within sixty days, the Board may thereafter withhold payment of all Dividend s ,
      bonuses, or other moneys payable or rights accruing in respect of the share(s) and/or
      Debenture(s) until the requirements of the notice have been complied with.
Dematerialisation of Securities

64.    (1)     For the purpose of this Article:
               (a)     'Beneficial Owner' means a person whose name is recorded as such with a
                       Depository;
               (b)     ‘SEBI or Board’ means the Securities and Exchange Board of India;
               (c)     ‘Depository’ means a Company formed and registered under the Companies
                       Act, 1956 and which has been granted a certificate of registration to act as a
                       depository under the Securities and Exchange Board of India Act, 1992; and
               (d)     ‘Security’ means such security as may be specified by SEBI from time to time.

       (2)     Dematerialisation of Securities: Notwithstanding anything contained in these Articles,
               the Company shall be entitled to dematerialise its securities and to offer securities in a
               dematerialise form pursuant to the provisions of Depositories Act, 1996.

       (3)     Option for Investors: Every person subscribing to securities offered by the Company
               shall have the option to receive securities certificates or to hold the securities with a
               depository. Such a person who is the beneficial owner of the securities can at any time
               opt out of a depository, if permitted by the law, in respect of any securities in the manner
               provided by the Depositories Act, and the Company shall, in the manner and within the
               time prescribed, issue to the beneficial owner the required certificates of securities.

       (4)     Securities in Depositories to be in fungible form: All securities held by a depository
               shall be dematerialised and be in fungible form. Nothing contained in Section 153, 153A,


                                                     188
                153B, 187B 187C, and 372 of the Act, shall apply to depository in respect of the securities
                held by it on behalf of the beneficial owners.

        (5)     Rights of Depository and Beneficial Owners:
                (a)     Notwithstanding anything to the contrary contained in the Act, or this Article, a
                        depository shall be deemed to be the registered owner for the purpose of
                        effecting transfer of ownership of security on behalf of the beneficial owner.
                (b)     Save as otherwise provided in (a) above, the depository as the registered owner
                        of the securities shall not have any voting rights and any rights in respect of the
                        securities held by it.
                (c)     Every person holding securities of the Company and whose name is entered as
                        the beneficial owner in the records of the depository shall be deemed to be a
                        member of the Company. The beneficial owner of securities shall be entitled to
                        all the rights and benefits and be subject to all the liabilities in respect of this
                        securities which are held by depository.

        (6)     Service of Documents: Notwithstanding anything in the Act or these Articles to the
                contrary where securities are held in depository, the records of the beneficial ownership
                may be served by such depository on the Company by means of electronic mode or by
                delivery of floppies or disc.
        (7)     Transfer of Securities: Nothing contained in Section 108 of the Act or these Articles shall
                apply to a transfer of securities effected by transferor and transferee both of whom are
                entered as beneficial owners in the records of a depository.

        (8)     Allotment of Securities dealt with a depository: Notwithstanding anything in the Act or
                these Articles, where securities are delt with by a depository, the Company shall intimate
                the details thereof to the depository immediately on allotment of such securities.

        (9)     Distinctive numbers of Securities dealt with in a Depository : Nothing contained in the
                Act, or these Article regarding the necessity of having distinctive numbers for securities
                issued by the Company shall apply to securities held with a depository.

        (10)   Register and index of Beneficial Owner: The Register and Index of Beneficial Owners
               maintained by Depository under the Depository Act, 1996, shall be deemed to be the
               Register and Index of Members and security holder for the purposes of these Articles.
 General Meetings

 75.   All General Meetings other than the Annual General Meetings of the Company shall be
       called Extra-Ordinary General Meetings.

 76.    The Board may, whenever, it thinks, fit call an Extraordinary General Meeting.

 77.    If at any time there are not within India, Directors capable of acting who are sufficient in
        number to form a quorum, any Director or any two Members of the Company may call an
        extraordinary general meeting in the same manners, as nearly as possible, to that in which
        such a meeting may be called by the Board.
 Powers of Board of Directors

101.   The Directors may enter into contracts or arrangements on behalf of the Company subject to the
       necessary disclosures required by the Act being made wherever any Director is any way,
       whether directly or indirectly concerned or interested in the contract or arrangement.



                                                   189
102.    (1)     Subject to the provisions of sections 58A, 292 and 293 of the Act, the
                Director may exercise all the powers of the Company to borrow money and to
                mortgage or charge its undertaking, property (both present and future) and
                uncalled capital, or any part thereof and to issue Debentures, Debenture-stock and
                other securities whether outright or as security for any debt, liability or
                obligation of the Company or of any third party.

        (2)     The payment or repayment of moneys borrowed as aforesaid may be secured in such
                manner and upon such terms and conditions in all respects as the Board may think
                fit and in particular by a resolution passed at a meeting of the Board (and not by
                circulation) by the issue of Debenture or Debenture stock of the Company, charged
                upon all or any of the property of the Company (both present and future), including its
                uncalled capital for the time being.

103.    Any Debentures, Debenture-stock or other securities may be issued at a discount, premium or
        otherwise, may be made assignable free from any equities between the Company and person
        to whom the same may be issued and may be issued on the condition that they shall be
        convertible into Shares of any authorised denomination, and with privileges and conditions
        as to redemption, surrender, drawings, allotment      of Shares, attending (but not voting) at
        General Meeting, appointment of Directors and otherwise, provided that Debentures with
        the right to allotment of or conversion into Shares shall not be issued except with the sanction
        of the Company in General Meeting.

 104.    All cheques, promissory notes, drafts, hundies, bills of exchange and other negotiable
         instruments and all receipts for moneys paid to the Company, shall be signed, drawn,
         accepted, endorsed or otherwise executed, as the case may be, by such person and in such
         manner as the Board may, from time to time, by resolution determine.

 Seal

 117.   (1)     The Board shall provide a Common Seal for the purpose of the Company
                and shall have power from time to time to destroy the same and substitute a new Seal in
                lieu thereof and the Directors shall provide for the safe custody of the seal.

         (2)    Subject to statutory requirements as to Share Certificates or otherwise the seal of the
                Company shall not be affixed to any instrument except by the authority of a resolution of
                the Board or of a Committee of the Board authorised by it in that behalf and except in the
                presence of atleast one Director and of the Secretary or of two Directors, who shall sign
                every instrument to which the seal of the Company is so affixed in their presence.

 Dividends and Reserve

 118.    The Company in General Meeting may declare Dividends, but no Dividend shall exceed the
         amount recommended by the Board.

 119.    The Board may from time to time pay to the members such interim Dividends as appear to it to
         be justified by the profits of the Company.

 120.    (1)    The Board may, before recommending any Dividend, set aside out of the




                                                   190
              profits of the Company such sums as it thinks proper as a reserve or reserves which shall,
              at the discretion of the Board, be applicable for any purpose to which the profits of the
              Company may be properly applied, including provision for meeting contingencies or for
              equalizing Dividends; and pending such application, may, at the like discretion, either be
              employed in the business of the Company or be invested in such investments (other than
              Shares of the Company) as the Board may, from time to time, think fit.

       (2)    The Board may also carry forward any profits which it may think prudent not to divide,
              without setting them aside as a reserve.

121.   (1)    Subject to the rights of persons, if any, entitled to Shares with special
              rights as to Dividends, all Dividends shall be declared and paid according to the
              amounts paid or credited as paid on the Shares in respect whereof the Dividend is paid.

       (2)    No amount paid or credited as paid on a share in advance of calls shall be treated for the
              purposes of this regulation as paid on the share.

       (3)    All Dividends shall be apportioned and paid proportionately to the amounts paid or
              credited as paid on the Shares during any portion or portions of the .period in respect of
              which the Dividend is paid; but if any share is issued on terms providing that it shall
              rank for Dividend as from a particular date such share shall rank for Dividend
              accordingly.

122.   The Board may deduct from any Dividend payable to any member all sums of money if any,
       presently payable by him to the Company on account of calls or otherwise in relation to the
       Shares of the Company.

123.   (1)    Any Dividend , interest or other moneys payable in cash in respect of
              Shares may be paid by cheque or warrant sent through the post directed to the registered
              address of the holder or, in the case of joint holders, to the registered address of that one
              of the joint holders who is first named on the register of members, or to such person and
              to such address as the holder or joint holders may in writing direct.

       (2)    Every such cheque or warrant shall be made payable to the order of the person to whom
              it is sent.

124.   Any one of two or more joint holders of a share may give effectual receipts for any Dividends,
       bonuses or other moneys payable in respect of such share.

125.   Notice of any Dividend that may have been declared shall be given to the persons entitled to
       share therein in the manner mentioned in the Act.

126.   No unpaid Dividend shall bear interest against the Company.

127.   (1)    The Directors may retain the Dividends payable upon shares in respect of
              which any person is under the transmission clause of these Articles entitled to become a
              member or which any person under that clause is entitled to transfer, until such person
              shall become a member in respect of such shares or shall duly transfer the same.

       (2)    A transfer of shares shall not pass the right to any Dividend declared thereon before the
              registration of the transfer.


                                                  191
 128.    (1)     Where the Company has declared a Dividend but which has not been paid,
                 or the Dividend warrant in respect thereof has not been posted or claimed, within thirty
                 days from the date of the declaration, to any shareholder entitled to the payment of a
                 dividend, the Company shall, within seven days from the date of expiry of the said
                 period of thirty days, transfer the total amount of dividend which remains unpaid or
                 unclaimed, to a special account to be opened by the company in that behalf in any
                 scheduled bank, to be called "Unpaid Dividend Account of Surya Food & Agro Limited".

         (2)     Any money transferred to the unpaid dividend account of a company which remains
                 unpaid or unclaimed for a period of seven years from the date of such transfer shall be
                 transferred by the company to the Investor Education and Protection Fund (hereinafter
                 referred to as the Fund) established under sub-section (1) of section 205C of the Act.

         (3)     No unclaimed or unpaid Dividend shall be forfeited by the Board.


 Capitalization of Profits

 129.    (1)     The Company in General Meeting may, upon the recommendation
                of the Board resolve :-
         (a)    that it is desirable to capitalize any part of the amount for the time being standing to the
                credit of any of the Company's reserve accounts or to the credit of the Profit and Loss
                Account, or otherwise available for distribution ; and
         (b)    that such sum be accordingly set free for distribution in the manner specified in sub-
                clause (2) hereof, among the members who would have been entitled thereto, if
                distributed by way of Dividend and in the same proportions.

         (2)    The sum aforesaid shall not be paid in cash, but shall be applied, subject to the provisions
                contained in sub-clause (3) hereof, either in or towards:-

                 (i)     paying up any amounts for the time being unpaid on any Shares held by such
                         members respectively ;
                 (ii)    paying up in full, unissued Shares of the Company to be allotted and
                         distributed, credited as fully paid up, to and amongst such members in the
                         proportions aforesaid : or
                 (iii)   partly in the way specified in sub-clause (i) and partly in that is specified in sub-
                         clause (ii).

         (3)     Any share premium account and any capital redemption reserve fund may, for the
                 purpose of this regulation, only be applied in the paying up of unissued share to be
                 issued to members of the Company as fully paid bonus Shares.

        (4)      The Board shall give effect to the resolution passed by the Company in pursuance of this
                 regulation.

130.    (1)      Whenever such a resolution as aforesaid shall have been passed, the
                 Board shall :-
         (a)     make all appropriations and applications of the undivided profits resolved to be
                 capitalized thereby and allotment and issue of fully paid Shares, if any : and
        (b)      do all acts and things required to give effect thereto.




                                                    192
       (2)     The Board shall have full power :-
       (a)    to make such provision, by the issue of fractional certificates or by payment in cash or
              otherwise as it thinks fit in the case of Shares becoming distributable in fractions : and
              also
       (b)    to authorise any person to enter, on behalf of all the members entitled thereto, into an
              agreement with the Company providing for the allotment to him respectively, credited
              as fully paid up, of any further Shares to which that may be entitled upon such
              capitalisation or (as the case may require) for the payment by the Company on their
              behalf, by the application thereto of their respective proportions of the profit
              resolved to be capitalised of the amounts or any part of the amounts remaining unpaid
              on their existing Shares.

       (3)    Any agreement made under such authority shall be effective and on all such
              members..

Indemnity

133.   Subject to provisions of section 201 of the Act, every Director, Wholetime Director, Managing
        Director, Manager, secretary and other Officer or employee for the time being of the Company
        shall be indemnified by the Company and it shall be duty of the Directors, out of the funds of the
        Company to pay, bona fide costs, losses and expenses which any such officer may incur or
        become liable to by reason of any way in the discharge of his duties; and in particular and so as
        not to limit the generality of the foregoing provisions; against any liability incurred by him in
        defending any proceedings, whether civil or criminal, in which judgment is given in his favour
        or in which he is acquitted or in connection with any application under section 633 in which
        relief is granted to him by the Court. The amount for which indemnity is provided shall
        immediately attach as a charge on the property of the Company.




                                                  193
                 X. MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION

The following contracts and agreements referred to (not being contracts entered into in the ordinary
course of business carried on or intended to be carried on by the Company or contracts entered into more
than two years before this DRHP), which are or may be deemed material to be material have been entered
into by or on behalf of the Company. Copies of these contracts together with copies of documents
referred under Material Documents below all of which have been attached to the copy of this DRHP and
have been delivered to the Stock Exchanges and may be inspected at the Registered Office of the
Company between 9:30 am to 5:30 pm on any working day from the date of this DRHP until the date of
closure of the subscription List.

Material contracts


1.   Memorandum of Understanding dated 05/09/2007 entered into between the Company and Keynote
     Corporate Services Limited, Lead Manager to the Issue.
2.   Memorandum of Understanding dated 29/09/2007 entered into between the Company and Beetel
     Finance & Computer Services (P) Ltd., Registrar to the Issue.
3.   Escrow Agreement dated [•], between the Company, the BRLM, the Escrow Collection Banks and the
     Registrar to the Issue.
4.   Syndicate Agreement dated [•] between the Company, BRLM and Syndicate Members.
5.   Underwriting Agreement dated [•] between the Company, BRLM and Syndicate Members.
6.   Copy of Tripartite agreement dated [•] entered into between the Company, CDSL and Registrar to
     the Issue.
7.   Copy of Tripartite agreement dated [•] entered into between the Company, NSDL and Registrar to
     the Issue.

Material Documents


1.   Memorandum of Association and Articles of Association of the Company, as amended from time to
     time.
2.   Shareholders’ resolutions dated 18/09/2007 in relation to this Issue.
3.   Resolutions of the general body for appointment and remuneration of our whole-time Directors.
4.   Balance Sheets of the Company for the financial years ending on March 31, 2007, 2006, 2005, 2004, and
     2003.
5.   General power of attorney executed by our Directors in favour of person(s) for signing and making
     necessary changes to Draft Red Herring Prospectus and other related documents.
6.   Consents of Auditors, Bankers to the Company, BRLM, Syndicate Members, Registrar to the Issue,
     Domestic Legal Counsel to the Company, Directors of our Company, Company Secretary and
     Compliance Officer, as referred to, in their respective capacities.
7.   Legal Due Diligence Report dated 17/10/2007 by Vaish Associates, Advocates.
8.   Appraisal Memorandum of our Company dated 23/10/2007 by State Bank of India.
9.   Copy of letter no. OBND/CPC/2007-08/47 dated 23/10/2007 for in-principle sanction of term loan
     from State Bank of India for the purpose of the proposed biscuit expansion project.




                                                    194
10. Copy of certificate dated 22/10/2007 issued by Vinay Aggarwal & Associates, Chartered Accountant
    and Statutory Auditors of the Company in terms of Part II Schedule II of the Companies Act 1956
    including capitalisation statement, taxation statement and accounting ratio.
11. Copy of certificate dated 22/10/2007 issued by Vinay Aggarwal & Associates, Chartered Accountant
    and Statutory Auditors of the Company regarding tax benefits accruing to the company and its
    shareholders.
12. Copy of certificate dated 22/10/2007 received from Vinay Aggarwal & Associates, Chartered
    Accountant and Statutory Auditors of the Company regarding sources and deployment of funds.
13. Copy of certificate dated 19/10/2007 received from M. B. Gupta & Co., Chartered Accountant and
    Statutory Auditors of Surya Processed Food Pvt. Ltd. regarding sources and deployment of funds.
14. Undertakings by the Company.
15. In-principle approval dated [•] and [•] from NSE and BSE for listing of the securities offered through
    this Prospectus.
16. SEBI Observation Letter No. [•] dated [•] issued by the Securities and Exchange Board of India.


Any of the contracts or documents mentioned in the DRHP may be amended or modified at any time if
so required in the interest of our Company or if required by the other parties, without reference to the
shareholders subject to compliance of the provisions contained in the Companies Act and other relevant
statutes.




                                                   195
                                         XI. DECLARATION

All the relevant provisions of the Companies Act, 1956, and the guidelines issued by the Government of
India or the guidelines issued by Securities and Exchange Board of India, established under Section 3 of
the Securities and Exchange Board of India Act, 1992, as the case may be, have been complied with and
no statement made in this DRHP is contrary to the provisions of the Companies Act, 1956, the Securities
and Exchange Board of India Act, 1992 or rules made thereunder or guidelines issued, as the case may be.
We further certify that all statements in this DRHP are true and correct.

Signed by all Directors

Sd/-
Shri. Ballabh Prasad Agarwala


Sd/-
Shri. Manoj kumar Agarwal


Sd/-
Shri. Navin Kumar Agrawal


Sd/-
Shri. Shekhar Agrawal


Sd/-
Shri. Pradeep Kumar Jain


Sd/-
Shri. Ram Lakhan Prasad Sinha


Sd/-
Shri. Ajay Kumar Ghosh


Sd/-
Shri. Ajay Kumar Raman


Date: 23/10/2007
Place: NOIDA




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